Law Decoded: Crypto retirement plans get hot with Warren and Lummis making their moves, May 2–9, 2022

Published at: May 9, 2022

Retirement plans still largely remain at the periphery of both crypto adoption and the regulatory discussion. But last week, a major development emerged in this department. United States Senators Elizabeth Warren of Massachusetts and Tina Smith of Minnesota became concerned about Fidelity’s recent announcement of adding Bitcoin (BTC) to its clients’ 401(k) retirement investment menu. In a letter to the company’s CEO Abigail Johnson, the lawmakers expressed their uneasiness over a “conflict of interests” and the “significant risks of fraud, theft and loss,” requesting from Fidelity a detailed outline of risk mitigation actions. 

Crypto 401(k) plans are still relatively rare, but they have already drawn suspicious attention from the U.S. Department of Labor. Crypto retirement investment does have its allies in high places, though. In response to Warren and Smith’s letter, Senator Tommy Tuberville from Alabama has unveiled a new bill titled the Financial Freedom Act to allow Americans to add cryptocurrency to their 401(k) retirement savings plan unencumbered by regulatory guidance.

Meanwhile, Wyoming Senator Cynthia Lummis’ hotly-anticipated crypto bill remains in the works. This week, Lummis once again teased it during a livestream, mentioning her intention to allow — perhaps, to legitimize, as it isn’t really prohibited — the integration of crypto assets into Americans’ 401(k) retirement savings packages.

Meanwhile in Europe

“A global agreement on crypto should first enshrine that no product remains unregulated,” stated Mairead McGuinness, the commissioner for financial services, financial stability and capital markets union at the European Commission, stated in her opinion piece last week. McGuinness called on the European Union and the United States to lead the global push toward coordinated crypto regulation.

As of late, the European Union’s rocky path has been met with mixed success. While the European Commission’s recent report appeared to be surprisingly comprehensive on decentralized finance (DeFi) and urged regulators to rethink their approach to the sector, the European Central Bank confirmed the digital euro’s critics’ worst expectations by letting slip that user anonymity was “not a desirable option.”

J.D. Vance: A name to remember

U.S. midterm elections in November could be the first major electoral circle with crypto as a mainstream political issue, as a significant number of candidates place digital assets high on their agendas. One of them is 37-year-old J.D. Vance of Ohio, who won the local Republican Senate primary election last week. Come fall, Vance will face Democrat Tim Ryan, who is rather supportive of crypto as well. Not only does Vance hold some $250,000 in BTC, but he has secured backing from one of the most influential proponents of crypto, the billionaire Peter Thiel.

A holiday with crypto

It’s always sunny in the Bahamas — well, at least for the crypto industry. Bahamian Prime Minister Philip Davis said he expects that the recently published regulatory white paper will help the industry “grow and prosper” on the islands. Meanwhile, the founder of the hedge fund SkyBridge Capital Anthony Scaramucci believes that the Caribbean nation will have a shot at becoming one of the most “forward-thinking and economic visionary countries” in the next five years. And, there’s more from Cointelegraph’s recent visit to SALT’s Crypto Bahamas conference — including the interview with the crypto-friendly former U.S. presidential candidate Andrew Yang.

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Regulation
Bitcoin Regulation
Law
Investments
Congress
Europe
European Union
Elections
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