NY Wants to Forbid You From Investing Your Retirement in Crypto
If New York State gets its way it may soon be illegal to invest your retirement savings in Bitcoin.
Attorney General Letitia James is petitioning legislators to stop New Yorkers from investing their own money in cryptocurrencies. James has sent a letter to congress urging them to adopt legislation that would forbid New Yorkers from using Bitcoin and similar digital currencies as retirement investments.
The concern comes after Fidelity has begun to offer Bitcoin as an investment option for customers to use in their 401 (K) plans. On Monday, three senators sent a letter to Fidelity Investments CEO Abigail Johnson urging her to stop allowing the exposure to cryptocurrencies. Senators Elizabeth Warren, Richard J. Durbin and Tina Smith pointed to the recent collapse of the FTX cryptocurrencly exchange as an example of what can happen with digital currencies. FTX allegedly mishandled investors funds in what many financial analysts are describing as even worse than the collapse of Enron.
James says that investing in cryptocurrency leaves New Yorkers exposed to high risk which could instantly wipe out a lifetime of savings.
Over and over again, we have seen the dangers and pitfalls of cryptocurrencies and the wild swings in these funds. Hardworking Americans should not have to worry about their retirement savings being wiped out due to risky bets on unstable assets like cryptocurrencies.
While traditional investments also come with risk, their value is based on something tangibe, whether its the success of a business or the demand for a commodity. Cryptocurrencies have no intrinsic value and can rise or fall on a whim without any basis in fundamentals.
Some New York politicians, however, have championed investments in cryptocurrencies. Dutchess County Executive Marc Monlinaro, who recently won his bid for congress, campaigned on loosening restrictions on digital assets and wants the government to encourage more widespread acceptance of the controversial investment option.
Too often government is afraid to embrace the future. We are on the precipice of a massive economic shift and if we want to truly benefit and maximize our potential advancements around blockchain technology, we must encourage American innovators to step up and have the federal government step aside.
There are already many restrictions on how indivicuals can invest their money in an effort to protect Americans' retirement accounts. James is hoping congress can adjust the law to also include a prohibition of cryptocurrencies.
What do you think about the idea of legislating crypto retirement investments? Should New Yorkers be allowed to invest their 401 (K) in Bitcoin? Let us know your thoughts by texting us on our mobile app.