Alabama Republican Senator Tommy Tuberville has introduced a new bill, the Financial Freedom Act. It allows Americans to add cryptocurrency into their 401(k), retirement savings plan without regulatory restrictions.
Tuberville has responded to the Department of Labor (DOL’s) attempt to keep crypto out of 401k investment plans due to potential risk for investors. According to Cointelegraph, DOL stated that employees who invest in crypto via their 401(k), could be subject to legal action.
Senator Tuberville wrote:
“The Federal Government does not have the right to interfere with American workers’ ability to save their 401(k), as they see fit.”
He stated that the DOL’s March 10 policy against employees using brokerage windows to self-direct income investments was “inconsistent” with long-standing practice.
NEW BILL ALERT: I just introduced the #FinancialFreedomAct, allowing retirement savers to invest their 401(k) funds as they see fit. The government should not be in the business of telling retirement savers how they can invest their money.https://t.co/6LGtpxquOW
— May 5, 2022, Coach Tommy Tuberville (@SenTuberville).
Brokerage windows allow 401(k), investors to choose the investments that they invest in, rather than having their broker make them. The Senator continued:
“The new guidance of the agency ends this tradition in favor of Big-Brother government regulation. The Labor Department’s sweeping guidance, which requires fiduciaries to evaluate the suitability and limit investment options offered through a brokerage window, also imposes a huge regulatory burden on 401k plans.
Fidelity Investments, an investment management firm, announced on April 26. 26 that it would allow customers to add Bitcoin (BTC), to their 401(k), accounts. Democratic Senators Elizabeth Warren, Tim Smith and Abigail Johnson wrote to Fidelity CEO Abigail Johnson to complain about a possible conflict of interest because the company has been using crypto products since 2017. They also noted that crypto investments carry “significant risks of theft, fraud and loss.”
Senator Warren is vocally against crypto investments and referred to the industry last January as the “new Shadow Bank.”
Although Fidelity is not mentioned in the DOL’s new guidance, the DOL notes that cryptocurrency abuses could result in the closing down of trading platforms. This ultimately harms investors.
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Senator Tuberville stated that the Financial Freedom Act would prevent the DOL’s from restricting the types of investments that a self-directed retirement plan 401(k), or other self-directed retirement plan can invest. Tuberville stated clearly at the end his op-ed, “The Labor Department shouldn’t be able to limit what investments retirement savers may choose.”
“Whether you believe in cryptocurrency’s long-term economic prospects, your choice about where to invest your retirement savings should be yours and not the government.”
The brand new bill has not been supported by any other senators. To be passed by the Senate, it would have to receive a majority of the votes. The Senate is currently controlled by Democrats, making passage difficult and uphill. Tuberville made it clear.
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