NY Attorney General’s Crypto Advice to Congress
NY Attorney General’s crypto advice to congress. 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 said.
NYAG Letitia James urges Congress to ban Crypto investments in retirement accounts
New York Attorney General Letitia James announced on Tuesday that she “urged congressional leaders to pass legislation that would ban pension investments in digital assets, such as cryptocurrencies, digital coins and digital tokens”.
In a letter he sent to Sen. Ron Wyden (D-OR), Sen. Mike Crapo (R-ID), Rep. Richard Neal (D-MA) na Rep. Kevin Brady (R-TX) Tuesday, James wrote: “On behalf of the people of the state of New York, I urge Congress to pass legislation to designate digital assets — e.g., cryptocurrencies, digital coins, and digital tokens — as assets that cannot be purchased using funds in Individual Retirement Accounts (IRAs) and defined contribution plans, such as 401(k) and 457 plans.”
James gave a few reasons why cryptocurrencies are too risky to be left out of retirement plans. Having no practical value, he said they are highly volatile and “often a tool of fraud and crime”.
The Attorney General also spoke about the crash of Terra and the collapse of FTX, the second followed by selloffs in the crypto market. Crypto Exchange FTX filed for bankruptcy on Nov. 11 in the middle of research on the financial management of customers. Describing the “recent crypto market crash and other market turmoil,” Attorney General James said: “Investing Americans’ hard-earned retirement funds in crashing cryptocurrencies could wipe away a lifetime’s worth of hard work.”
“Time and time again, we have seen the dangers and pitfalls of cryptocurrencies and the wild exchange of these currencies. Hard-working Americans should not have to worry about losing their retirement money because of risky bets on non-paying assets. bills like cryptocurrencies,” the attorney general emphasized. 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 “will allow 401(k) plans to make digital assets an investment option,” James explained.
The Financial Freedom Act of 2022 “will prohibit the Secretary of Labor from restricting or prohibiting the investment offered through self-directed window shopping, that is, the Secretary of Labor will not be able to prohibit investment in assets digital,” NY Attorney. General said. Fidelity Investments, the largest 401(k) administrator by assets, began offering bitcoin investments in retirement accounts this fall. This upset the United States Department of Labor.
Treasury Secretary Janet Yellen warned that crypto is “very dangerous”, stating that it is not suitable for many people saving for retirement. This week, three US lawmakers sent Fidelity CEO Abigail Johnson a letter asking her company to stop offering bitcoin as an option for retirement accounts.