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NY Attorney General Urges Congress to Ban Crypto in Retirement Accounts

NY Attorney General Urges Congress to Ban Crypto in Retirement Accounts

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New York Attorney General Letitia James has urged Congress to pass legislation banning crypto investments in retirement accounts. “Hard-working Americans shouldn’t have to worry about their retirement savings being wiped out by risky bets on volatile assets like cryptocurrencies,” he stressed.

NYAG Letitia James urges Congress to ban crypto investments in retirement accounts

New York Attorney General Letitia James announced on Tuesday that she has “urged congressional leaders to pass legislation that would ban pension funds from investing in digital assets such as cryptocurrencies, digital coins and digital tokens.”

James wrote in a letter he sent Tuesday to Sen. Ron Wyden (D-OR), Sen. Mike Crapo (R-ID), Rep. Richard Neal (D-MA) and Rep. Kevin Brady (R-TX). :

On behalf of the people of New York State, I am calling on Congress to pass legislation to define digital assets – such as cryptocurrencies, digital coins and digital tokens – as assets that cannot be purchased using IRAs and assets. defined contribution plans such as 401(k) and 457 plans.

James laid out a few reasons why cryptocurrencies are too risky to allow in retirement plans. In addition to having no intrinsic value, he said, they are highly unstable and “often an instrument of fraud and crime.”

The Minister of Justice also referred to the terra crash and the collapse of FTX, both of which were followed by a sell-off in the crypto market. Crypto exchange FTX filed for bankruptcy on November 11, after it was investigated that it had mishandled customer funds.

Referring to “recent crypto market crashes and other market turbulence,” Attorney General James said:

Investing Americans’ hard-earned retirement funds in collapsing cryptocurrencies could wipe out a lifetime’s worth of hard work.

“Time and time again, we have seen the dangers and pitfalls of cryptocurrencies and the wild swings of these funds. Hardworking Americans should not have to worry about their retirement savings being wiped out because of risky bets made on volatile assets like cryptocurrencies,” the attorney general stressed.

James also wants lawmakers to reject two bills that would allow crypto investments in retirement accounts. He wrote:

I urge Congress to reject the recently proposed Retirement Savings Modernization Act … and the Financial Freedom Act of 2022.

The Retirement Savings Modernization Act would “clearly allow 401(k) plan fiduciaries to make digital assets an investment option,” James explained.

The Financial Freedom Act of 2022 “prohibited the Secretary of Labor from limiting or prohibiting investments offered through a self-directed brokerage window, meaning that the Secretary of Labor could not prohibit investments in digital assets,” the NY Attorney General emphasized.

Fidelity Investments, the largest 401(k) administrator by assets, began offering bitcoin investments in retirement accounts this fall. This has plagued the US Department of Labor. Treasury Secretary Janet Yellen has also warned that crypto is “very risky”, noting that it is not suitable for most retirement savers. This week, three US senators sent a letter to Fidelity CEO Abigail Johnson urging her company to stop offering bitcoin as an option for retirement accounts.

What do you think of New York Attorney General Letitia James calling on Congress to ban crypto investments in retirement accounts? Let us know in the comments section below.

Source: Bitcoin.com



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