Bills are being introduced in both the House and Senate that would strip away restrictions on 401(k) retirement plans offering investors bitcoin and other cryptocurrency options.
On Feb. 15, Sen. Tommy Tuberville announced the reintroduction of his 2022 bill to legalize the purchase of cryptocurrencies with 401(k) retirement account funds.
Calling the Financial Freedom Act an attempt to "keep the government out of Americans' investment decisions," the Alabama Republican said his bill was focused on Labor Department (DoL) warnings against allowing the employer-sponsored plans to offer crypto investments.
Florida Republican Rep. Byron Donalds will introduce a companion bill in the House of Representatives on Friday, according to reports.
Fidelity's announcement last year that it allowed plan sponsors to permit participants to invest up to 20% of their 401(k)s on Bitcoin via digital asset accounts brought an outpouring of opposition from the DoL and other regulatory agencies warning of dire consequences for allowing such investments.
A number of Democratic senators, including Elizabeth Warren of Massachusetts and Dick Durbin of Illinois penned a public letter to Fidelity to express "grave concerns" about the "appropriateness" of offering "untested, highly volatile asset like Bitcoin" as an investment option.
Sen. Tuberville takes the opposite perspective. His bill would "reverse existing U.S. Department of Labor (DOL) policy and prohibit any future regulatory guidance that limits the type of investments self-directed 401(k) account investors can select through a brokerage window." He said:
"Meddling in 401(k) investments through overregulation restrains financial growth and restricts personal liberty. The federal government shouldn't choose winners and losers in the investment game. Bureaucrats have no business telling hard working Americans how to manage their savings accounts."
Co-sponsors include Sen. Cynthia Lummis of Wyoming, Rick Scott of Florida, and Mike Braun of Indiana. Sen. Lummis is co-author of the bipartisan Responsible Financial Innovation Act, which is one of the main pieces of legislation seeking to provide a regulatory regime for crypto.
On Feb. 15, Sen. Warren announced plans to introduce a bill that would add very strong — fatally strong in many crypto industry opinions — anti-money-laundering (AML) regulations to crypto, including decentralized finance, or DeFi.
