New York AG Urges Congress to Ban Bitcoin from Retirement Funds
New York Attorney General Letitia James asked US lawmakers to ban crypto investments in individual retirement accounts (IRAs) and retirement plans like 401(k) and 457, she wrote in a letter to Congress. James emphasized the need to protect US workers’ retirement funds from high-risk crypto assets, particularly after the recent market turmoil.
NY AG Asks Congress to Reject Two Proposed Acts that Seek to Allow Crypto Investments Via Retirement Funds
Letitia James, Attorney General of New York, wrote a letter to Congress asking US policymakers to prevent retirement funds from investing in digital assets in an effort to protect consumers. James urged Congress to pass legislation that would ban US residents from investing in crypto through their individual retirement accounts (IRAs) and defined contribution retirement plans including 401(k) and 457.
“IRAs and defined contribution retirement plans are key investment vehicles for working people who choose to forego income now to fund their retirement later. For a substantial number of New Yorkers—indeed many Americans—the lion’s share of their retirement savings will come from these plans.”
Legislation to Protect Individual Retirement Accounts and Defined Contribution Plans from the Risks of Digital Assets
Moreover, the NY Attorney General also asked Congress to dismiss the recently proposed Retirement Savings Modernization Act, which was meant to allow US citizens to invest in digital assets through their retirement funds. James also urged Congress to reject the Financial Freedom Act of 2022, which would prevent the Secretary of Labor from banning digital asset investments.
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NY AG Says Crypto Assets “Have No Intrinsic Value”
In the letter, James listed four reasons why US lawmakers should consider prohibiting crypto investments through retirement funds. Firstly, James argued that most digital assets “have no intrinsic value” and hence they are too unstable to be a suitable asset for retirement savings, she wrote.
Additionally, James said crypto companies represent a “breeding ground for fraud, crime, and theft” and would not provide suitable protection for retirement savings. Finally, James wrote that the threats digital assets pose to retirement funds have already materialized.
The NY Attorney General’s letter comes after several financial institutions including Fidelity Investments listed Bitcoin as an investment option in their 401(k) retirement plans. Similarly, 401(k) provider ForUsAll recently announced that 50 of its clients are now allowing crypto investments through the retirement platform Alt401(k). This week, three US senators urged Fidelity to remove Bitcoin from its pension plans.
Earlier this year, Letitia James and several other state attorney generals filed a lawsuit against the crypto lender Nexo for allegedly offering unregistered securities. In the complaint, James accused Nexo of misleading investors by “claiming that it is a licensed and registered platform.”
This article originally appeared on The Tokenist.
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