Several U.S. lawmakers have introduced the Retirement Savings Modernization Act to provide 401(k) retirement savers access to a wide range of investments, including crypto assets. “With inflation at record highs, a stock market downturn, and a potential recession on the horizon, many Americans are rightfully concerned about their financial future,” said U.S. Senator Pat Toomey.
Retirement Savings Modernization Act Introduced
The U.S. Senate Committee on Banking, Housing, and Urban Affairs announced Thursday that Senators Pat Toomey (R-PA) and Tim Scott (R-SC) and Representative Peter Meijer (R-MI) have introduced a bill called the Retirement Savings Modernization Act.
The bill aims “to bolster Americans’ retirement savings by allowing workers to diversify assets included in defined contribution plans, such as 401(k) plans,” the announcement details. “This legislation will amend the Employee Retirement Income Security Act of 1974 (ERISA) to clarify that private sector retirement plan sponsors may offer plans, including both pensions and 401(k)s, that are prudently diversified across the full range of asset classes.”
Senator Toomey opined, “With inflation at record highs, a stock market downturn, and a potential recession on the horizon, many Americans are rightfully concerned about their financial future,” elaborating:
By providing 401(k) savers with access to the same asset classes as pension plans, my legislation will open the door to a more secure retirement for millions of Americans.
While pension plans and 401(k) plans are covered by the same law, the former have incorporated asset classes outside of the public markets since 1982. Meanwhile, the latter “almost never incorporate exposure to alternative assets due to fiduciaries’ anticipated litigation risk,” the announcement explains. The bill lists “digital assets” as a “covered investment.”
Senator Scott described: “Inflation has eroded and devalued the savings many Americans spent their lives accumulating. This bill would modernize retirement plans to ensure they can provide diverse investments with higher returns. American workers and their families deserve to go about their lives with peace of mind, knowing their hard-earned money will be secure when they choose to retire.”
Until the 1970s, most Americans working in the private sector relied on pension plans for retirement. Today, the vast majority of private sector workers rely on 401(k) plans. “However, pension plans have consistently outperformed 401(k) plans because they diversify across the full range of asset classes, putting one of every five dollars in alternative asset classes like private equity,” the lawmakers noted.
Representative Meijer stressed:
Americans deserve flexibility with their retirement options, especially in times of fiscal uncertainty.
The U.S. Department of Labor (DOL) issued a notice in March warning about crypto investments in 401(k) plans. “The department has serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptocurrencies, or other products whose value is tied to cryptocurrencies,” the DOL wrote. “These investments present significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft, and loss.”
Despite the warning by the Labor Department, Fidelity, a major 401(k) plan administrator, announced in April that it will allow bitcoin as an investment option in its new 401(k) products. The financial giant’s decision caused concerns for the Labor Department. Senator Elizabeth Warren (D-MA) is also worried, demanding answers from Fidelity regarding its decision to allow bitcoin in 401(k) plans.
In May, a U.S. senator introduced a bill prohibiting the Labor Department from interfering with investments in retirement accounts. In June, U.S. Treasury Secretary Janet Yellen said that crypto is “very risky,” emphasizing that it is unsuitable for most retirement savers.
Do you think all retirement savers should be able to invest in anything including cryptocurrencies? Let us know in the comments section below.
Source: Regulation Archives – Bitcoin News
US Senator Focused on Crypto Money Laundering Crackdown — Urges Congress, Regulators to Take Action
U.S. Senator Elizabeth Warren has called on Congress to ensure regulators, such as the Securities and Exchange Commission (SEC), have the tools to regulate the crypto industry effectively and crack down on crypto money laundering activities. “The current legal structure essentially holds up a giant sign over crypto that says, money laundering done here,” the […]
U.S. Senator Elizabeth Warren has called on Congress to ensure regulators, such as the Securities and Exchange Commission (SEC), have the tools to regulate the crypto industry effectively and crack down on crypto money laundering activities. “The current legal structure essentially holds up a giant sign over crypto that says, money laundering done here,” the lawmaker stressed.
Senator Urges Congress to Crack Down on Crypto Money Laundering
U.S. Senator Elizabeth Warren (D-MA) said in an interview with Politico’s Morning Money Wednesday that cracking down on money laundering activities is her “main focus” in terms of crypto-related legislation.
The senator confirmed that she will reintroduce her bill titled “Digital Asset Anti-Money Laundering Act of 2022.” Originally introduced in December last year, this bill is “the most direct attack” on the personal freedom and privacy of crypto users, according to experts in the field.
Warren explained that money laundering is “not nearly as visible to the public” as fraud. “It occurs in the darkest shadows of the crypto world, but its impact on our national security and law enforcement is immense. … The current legal structure essentially holds up a giant sign over crypto that says, money laundering done here,” the senator described, elaborating:
This is not about inventing any new form of anti-money laundering rules. This is about applying exactly the same set of rules that apply across every other financial industry.
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has also said that crypto should be treated the same as other capital markets.
Senator Warren Wants Congress to Empower Regulators to Be Effective ‘Cop on the Beat’
“There are two very different kinds of crypto problems,” Warren continued, noting that “one is consumer fraud.” The senator stressed: “That’s what we’ve seen when FTX and other exchanges collapsed. It’s part of the pump and dump and rug pulls, and all the other ways that customers get cheated.” Emphasizing that both Congress and regulators need to take action, she detailed:
There are a lot of regulatory tools out there already to deal with that. We need regulators to use those tools, and Congress needs to make sure that those regulators have the resources they need to be an effective cop on the beat.
SEC Chair Gensler has often said that the securities regulator “will serve as the cop of the beat” and bring enforcement actions against uncompliant crypto firms. Senator Warren has been pushing for the SEC to impose tougher rules on the crypto sector and use its full authority to regulate crypto trading.
Warren has long been a crypto skeptic. She has warned about “a run on crypto” that may need a federal bailout and has repeatedly raised concerns about the environmental impact of bitcoin mining. She wants Congress and the Treasury to urgently adopt a policy to mitigate crypto risks. Following the collapse of crypto exchange FTX, she also urged Fidelity Investments to stop offering bitcoin as an option in 401(k) retirement accounts.
What do you think about the statements made by Senator Elizabeth Warren? Let us know in the comments section below.
Source: Regulation Archives – Bitcoin News