A Senator from Alabama is introducing a new bill that could potentially stifle the government from restricting top digital asset Bitcoin (BTC) and other cryptocurrencies as investment options for 401(k) retirement plans.
Republican Senator Tommy Tuberville is unveiling the Financial Freedom Act of 2022, which would counter attempts by the U.S. Department of Labor (DOL) to exclude crypto assets as a choice for self-directed 401(k) plans.
The legislation would ensure that financial institutions and employers would not face legal troubles for offering virtual assets as a means of investment, according to a press release from Tuberville, who is a former college football coach.
“The [DOL’s] guidance attempts to bar 401(k) investors from investing in cryptocurrency and undermines 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.
The guidance threatened that employers and investment firms could be subject to a DOL investigation and enforcement actions should they allow individuals using brokerage windows to invest in cryptocurrency.
Senator Tuberville’s legislation would empower retirement savers to invest as they see fit and ensure that plan sponsors and financial firms are not punished for allowing investors to exercise financial freedom.“
Another US Congressman, Representative Byron Donalds of Florida, also recently introduced the House of Representatives’ version of the legislation.
“Today, I introduced the House companion of the Financial Freedom Act of 2022. This bill prohibits [the DOL] from restricting the type of investments that self-directed 401(k) account investors can choose.”
The DOL initially issued a warning in March about financial service firms exposing 401(k) participants to digital assets, citing volatility, uncertain valuations and an evolving regulatory environment as key reasons for concern.
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