Alabama Senator Tommy Tuberville has reintroduced legislation aiming to allow United States 401(k) retirement plans to include exposure to cryptocurrencies.
In a Feb. 15 announcement, Tuberville said the Financial Freedom Act — which he first introduced to the U.S. 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 crypto. According to the senator, the bill would bar the DOL from pursuing enforcement actions for individuals “using brokerage windows to invest in cryptocurrency”.
“The federal government shouldn’t choose winners and losers in the investment game,” said Tuberville. “My bill ensures that everyone who earns a paycheck has the financial freedom to invest in their futures however they see fit.”
Sen. Tuberville (R) plans to reintroduce the “Financial Freedoms Act”
It aims to stop the Dep of Labor from restricting individuals from investing their 401k’s into crypto
— Nancy Pelosi Stock Tracker ♟ (@PelosiTracker_) February 15, 2023
Tuberville reported that Senators Cynthia Lummis, Rick Scott, and Mike Braun had signed on as cosponsors of the bill. Lummis said in a December 2022 interview — following the crypto market crash and the bankruptcies of major firms including FTX, Voyager Digital, and Celsius Network — that she was “very comfortable” with having U.S. investors include Bitcoin (BTC) in their retirement accounts.
Politico reported on Feb. 14 that Florida Representative Byron Donalds planned to introduce an equivalent bill in the House of Representatives on Feb. 17. Donalds and Tuberville, both members of the Republican party, could face opposition from across the aisle — Democratic Senator Elizabeth Warren has previously expressed concerns about Fidelity Investments’ plans to include BTC in 401(k) accounts.
The DOL notice from March 2022 warned 401(k) account holders to “exercise extreme care” when dealing with investments in cryptocurrencies, citing the risk of fraud, theft and loss of funds. The U.S. Securities and Exchange Commission’s Office of Investor Education and Advocacy, the North American Securities Administrators Association, and Financial Industry Regulatory Authority also issued a notice on Feb. 7, warning that self-directed individual retirement accounts may include cryptocurrencies as potentially risky investments.