Fidelity should reconsider its retail clients' exposure to bitcoin in their retirement accounts in light of the FTX collapse, said three Democratic senators in a letter on Monday.
The U.S.-based financial services firm now allows companies to offers its digital assets account as part of their 401(k) line up, a Fidelity spokesperson told CoinDesk in a statement. Fidelity’s retirement accounts are big business: The company had an estimated $2.4 trillion in 401(k) assets in 2020, or more than a third of the total U.S. market at that time, according to research firm Cerulli Associates.
The senators – Richard Durbin (D-Ill.), Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.) – had previously expressed their trepidation over the plan in July, and the Department of Labor had expressed similar concerns in April.
"The ill-advised, deceptive and potentially illegal actions of a few have a direct impact on the valuation of bitcoin and other digital assets," according to this latest letter.
Already deep in a bear market, bitcoin () has fallen even further since the FTX exchange collapse earlier this month, touching a two-year low below $15,500 on Monday. The price had rebounded to $16,500 at press time.
"Recent events in the digital assets industry have further underscored the importance of standards and safeguards," a Fidelity spokesperson said. "As a firm that has been serving customers in financial markets for over 75 years, Fidelity has always prioritized operational excellence and customer protection across all of its businesses."
UPDATE (Nov. 23, 8:35 UTC): Add Fidelity statement in last paragraph.