Sen. Tommy Tuberville (R-AL) is reintroducing the Financial Freedom Act, aimed at allowing workplace retirement plans to invest in cryptocurrencies.
First introduced to the U.S. Senate in May 2022, Tuberville’s bill would reverse policy from the Employee Benefits Security Administration (EBSA) that warned plan fiduciaries of investment risk with cryptocurrencies.
Initially introduced on March 10, 2022, the note cautioned fiduciaries to “exercise extreme care,” before adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.
In a press release, Tuberville accused EBSA and the Department of Labor (DOL) of attempting to “bar 401(k) investors from investing in cryptocurrency,” and claims the guidance “undermined the ability of 401(k) plans to offer brokerage windows, which give retirement plan participants the ability to personally control how their assets are invested.”
Tuberville states that his bill would prohibit the DOL from investigating employers and investment firms who use brokerage windows to invest in crypto.
Sen. Cynthia Lummis (R-WY), Rick Scott (R-FL), and Mike Braun (R-IN) are listed as cosponsors of the bill, while Rep. Bryon Donalds (R-FL) was set to introduce a companion bill to the U.S. House of Representatives on February 17.
Controversy in cryptocurrencies
Crypto in 401(k)s has long been debated—with the opposition generally believing the asset is too risky and volatile to hold.
On the other side of the political sphere, Democrats have largely denounced the use of the alternative investments in retirement accounts. Last year, Senators Elizabeth Warren (D-MA) and Tina Smith (D-MN) expressed concern of its usage and asked Fidelity Investments to address the risks of adding Bitcoin as a 401(k) investment, along with requesting more information on its investment fees.
Warren and Smith, along with Sen. Richard Durbin (D-ILL) have since doubled-down on their opposition, calling on Fidelity to reconsider Bitcoin 401(k) offerings following the collapse of crypto-exchange platform FTX.
The Securities and Exchange Commission (SEC) has also spoken up against cryptocurrencies—just last week the regulator proposed tougher custody rules on assets including crypto.
SEE ALSO: