The head of treasury Janet Yellen, doesn’t recommend crypto 401K funds and said she doesn’t recommend investing the retirement funds into digital assets to most people so let’s read more today in our latest cryptocurrency news.
The head of treasury Janet Yellen commented on how it is not a good idea to include cryptocurrencies in retirement plans and called them a risky investment and that they should be regulated by Congress. During the event by the New York Times, Yellen shared her opinion on the attempt to include crypto in retirement plans that were undertaken by Fidelity Investments:
“It’s not something that I would recommend to most people who are saving for their retirement. To me it’s very risky investment.”
The discussion around digital currencies in 401K saw the participation of the Department of Labor and senators Tommy Tuberville, Elizabeth Warren, and Cynthia Lummis. Yellen also said that Congress could regulate the type of assets which can be included in the retirement programs:
“I’m not saying I recommend it, but that to my mind would be a reasonable thing.”
The last statement was said in the context of a legislative uncertainty that was following the topic of crypto as a retirement investment since the start. 401K investments are subject to the Employee Retirement Income Security Act and don’t specify which asset classes can or can’t be included in a 401K but do oblige fiduciaries to show the skill, care, and prudence that a prudent person would exercise.
Fidelity announced that it will allow 401K retirement savings accounts holders to invest in BTC and the US DOL also responded with a compliance report threatening legal action while Senators Elizabeth Warren and Tina Smith requested the company to provide answers on how they are planning to address the risks. In the meantime, Senator Tommy Tuberville, unveiled the Financial Freedom Act to allow investors to add crypto to their 401K retirement savings and Lummis tested the legalization of crypto in 401K as a part of her crypto bill.
As earlier reported, ForUsAll is a 401K provider with more than $1.7 billion in assets under management and decided to sue the US Department of Labor for planning an investigation into companies that offer crypto investment options to the 401K holders. The company indicated that the regulators discouraged employers from turning to crypto for their retirement plans.
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