New York Attorney General Letitia James is urging Congress to pass a law banning crypto investments in retirement accounts. “Hard-working Americans don’t have to worry about their retirement savings being depleted by risky bets on assets like cryptocurrencies,” she emphasized.

NYAG Letitia James Urges Congress to Ban Crypto Investing in Retirement Accounts

New York Attorney General Letitia James announced Tuesday that she “urges congressional leaders to pass prohibiting the investment of retirement funds in digital assets, such as cryptocurrencies, digital coins, and digital tokens.”

In a letter she sent Tuesday to Sen. Ron Wyden (D-OR), Sen. Mike Crapo (R-ID), Rep. Richard Neal (D-MA) and Rep. Kevin Brady (R-TX), James wrote road:

On behalf of the people of New York State, I urge Congress to pass designating digital assets such as cryptocurrencies, digital coins, and digital tokens as assets that cannot be purchased with funds in an Individual Retirement Account (IRA), as well as defined contribution plans such as 401s (k) and 457 plans.

James offers some reasons why cryptocurrencies are too risky to use for retirement planning. In addition to having no intrinsic value, they are extremely and “often an instrument of fraud and crime,” she said.

The attorney general also referred to the terra crash and the FTX crash, both of which were followed by a sell-off in the cryptocurrency market. Cryptocurrency exchange FTX filed for bankruptcy on Nov. 11 amid an investigation into the of customer funds.

Citing “the recent cryptocurrency market crash and other market turmoil,” Attorney General James said:

Investing Americans’ hard-earned retirement dollars in a crashing cryptocurrency could erase a lifetime of hard work.

“We’ve seen time and time again the dangers and pitfalls of cryptocurrencies and the wild volatility of these funds. Hard-working Americans don’t have to worry about their retirement savings being depleted by risky bets on assets like cryptocurrencies, ’ said the Attorney General.

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James also wants lawmakers to reject two bills that would allow crypto investments in retirement accounts. She wrote:

I urge Congress to veto the recently introduced Retirement Savings Modernization Act…and the Financial Freedom Act of 2022.

James explained that the Retirement Savings Modernization Act would “explicitly allow 401(k) plan trustees to consider digital assets as an investment option.”

The Financial Freedom Act of 2022 would “prohibit the Secretary of Labor from restricting or prohibiting the scope of investments through self-directed brokerage windows, i.e., the Secretary of Labor would not be able to prohibit investments in digital assets,” the New York Attorney General emphasized.

Investments, the largest 401(k) manager by assets, began offering bitcoin investments in retirement accounts this fall. That bothers the U.S. Department of Labor. Treasury Secretary Janet Yellen also warned that cryptocurrencies are “highly risky,” noting that they are not suitable for most retirement savers. This week, three U.S. senators sent a letter to Fidelity CEO Abigail Johnson urging her company to stop offering bitcoin as an option for retirement accounts.

What do you think of New York Attorney General Letitia James urging Congress to ban crypto investments in retirement accounts? Let us know in the comments section below.

Kevin Helms

A student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist since then. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.

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