Tommy Tuberville, a senator from Alabama, has presented legislation that would make it possible for 401(k) retirement plans in the United States to incorporate exposure to cryptocurrency investments.
In an announcement made on February 15, Tuberville stated that the Financial Freedom Act, which he had initially presented to the United States Senate in May 2022, aimed to reverse policy from the Department of Labor directing what type of investments were allowed in 401(k) plans, including cryptocurrency investments. Tuberville had initially introduced the bill. The senator claims that the proposed legislation would prevent the Department of Labor from initiating enforcement proceedings against those who “use brokerage windows to invest in bitcoin.”
According to Tuberville, the federal government should stay out of the business of picking winners and losers in the investment game. “By passing my legislation, I will assure that everyone who receives a wage will have the monetary freedom to invest in their futures in whichever manner they see appropriate.”
Tuberville shared the news that Senators Cynthia Lummis, Rick Scott, and Mike Braun had come forward to support the legislation and became co-sponsors. Following the collapse of the cryptocurrency market and the failure of major companies such as FTX, Voyager Digital, and Celsius Network, Lummis stated in an interview that she was “very comfortable” with the idea of U.S. investors including Bitcoin (BTC) in their retirement accounts. The interview took place in December 2022.
On the 14th of February, Politico published an article stating that Florida Representative Byron Donalds intended to propose a measure with the same name in the House of Representatives on the 17th of February. Donalds and Tuberville, both of whom are members of the Republican party, might run into resistance from the Democratic side of the aisle. Democratic Senator Elizabeth Warren has in the past voiced reservations over Fidelity Investments’ ambitions to integrate bitcoin in 401(k) accounts.
The notification issued by the DOL in March 2022 cautioned individuals who had 401(k) accounts that they should “exercise extreme care” when dealing with investments in cryptocurrencies. The letter cited the possibility of fraud, theft, and loss of assets. On February 7, a notice was issued by the Office of Investor Education and Advocacy of the United States Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA), all of which issued a warning that self-directed individual retirement accounts may include cryptocurrencies as potentially risky investments.