Last month, the Labor Department said that, while it would not ban cryptocurrency products like Coinbase’s from 401(k) retirement accounts, it was taking a close look at them to determine whether and, if so, how they belonged in 401(k)s. In their admittedly unbridled enthusiasm for all things blockchain-related, or perhaps distracted by grief, the good people at Fidelity Investments seem only to have heard the first part, announcing this week plans to allow retirement investors on its platform to invest up to 20% (!) of their golden years nest egg in that famously reliable and not-at-all volatile asset class, bitcoin, and also that they’d be hiring another 12,000 people to help with that and other things.
Fidelity said it's the first in the industry to allow such investments without having to go through a separate brokerage window, and it's already signed up one employer that will add the offering to its plan later this year…. "We have been developing this, anticipating some of the workforce trends that we see coming," [Fido head of workplace retirement offerings and platforms Dave] Gray said. "Our clients expect us to be ahead and developing innovative solutions."
Yea, well, Dave: The Labor Department has expectations, as well, and those included being listened to by those it regulates.
“We have grave concerns with what Fidelity has done,” Ali Khawar, acting assistant secretary of the Employee Benefits Security Administration, said in an interview with The Wall Street Journal…. Mr. Khawar said he received a heads up from Fidelity the day before the company disclosed its plan to give the 23,000 companies that use its 401(k) services the option to put bitcoin on the menu….
Mr. Khawar said he and his colleagues have scheduled a conversation with Fidelity to discuss some of the concerns that were highlighted in the March 10 guidance. Among the department’s specific concerns was the 20% figure, according to a senior department official.
Labor Department Criticizes Fidelity’s Plan to Put Bitcoin on 401(k) Menu [WSJ]
Fidelity will start offering bitcoin as an investment option in 401(k) accounts [NPR]
Fidelity Boosts Staff Again to Keep BlackRock, Vanguard at Bay [Bloomberg]
For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.