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Cryptocurrency to save retirement plans? Here’s what Alabama senator has to say

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According to a piece released by Alabama Senator Tommy Tuberville earlier today, the Republican politician supports allowing Americans to use cryptocurrency in their retirement funds. He has also presented the Financial Freedom Act, which would ban the US Department of Labor from restricting retirement plan investment options.

The US Department of Labor issued regulatory recommendations on March 10 in an attempt to prohibit cryptocurrency investments in 401(k) accounts, singling out this specific investment type. Tuberville believes that the Labor Department’s guidelines threaten to examine plans that allow participants to choose cryptocurrency investments, including brokerage windows, a mechanism that allows 401(k) plan participants to self-select their investments. He further added,

“The federal government has no business interfering with the ability of American workers to invest their 401(k) plan savings as they see fit.”

It stands true that this policy shift contradicts long-standing practices. Employers have long been allowed by the Labor Department to provide brokerage windows to employees who choose to manage the money they worked so hard to earn. The new advice from the agency puts a stop to the agency’s long heritage of economic empowerment in favor of big-brother government control.

Furthermore, the Labor Department’s overreaching guideline aims to impose a significant additional regulatory burden on 401(k) plan fiduciaries by requiring them to review the suitability of assets offered through a brokerage window and to limit investment possibilities. If a company or financial firm permits their 401(k) investors to invest in Bitcoin, they will now be subject to harsh punitive measures.

Will this new policy backfire on Fidelity’s cryptocurrency plan?

Fidelity Investments has announced that employers will be able to add Bitcoin to their 401(k) plans. Workers will be able to invest up to 20% of their assets in Bitcoin, potentially boosting Bitcoin adoption.

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The initiative drew the attention of the Labor Department. Fidelity’s offering has caused the federal agency “great concern.” It issued recommendations advising businesses to avoid exposing employees to cryptocurrencies, citing investor protection as one of the major concerns.

Fidelity has criticized the guidance, calling it “constructive.” The Labor Department, on the other hand, has no intention of changing its stance. It should be emphasized, however, that the guidance does not ban Fidelity from offering Bitcoin retirement plans.

Alabama and Texas Bans South African Firms After Crypto Credit Card Scam

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Securities watchdogs in both Alabama and Texas issued a cease and desist order following a crypto credit card scam promoted by South African firms. Accordance to a joint order issued by both the Texas State Securities Board (TSSB) and the Alabama Securities Commission (ASC), companies such as the South African Liquidity Gold Trust, Liquidity Gold Solution and Liquidity Global Card Solution and an individual named Lance Angus Jerrard have issued prohibition orders.

As per reports, the sanctioned firms and Jerrard advertised a fraudulent debit card, dubbed Liquidity Card on social networks and a radio station in Austin, Texas. The perpetrators wrongfully stated that there is a secure way for people to make money while staying at home amid the COVID-19 disaster.

Crypto credit card scam breakdown

The firms allegedly utilized their advertisements to claim that Liquid Card could help investors evade taxes by transacting in stablecoins such as TUSD, USDC and PAX coin. The fraudsters were to recruit and convince new users to commit a minimum of $1,150 in one portion or more of 8,400 parts in the crypto credit card scam. Furthermore, the investors claim that the debit card functions as a traditional debit card.

The project, which was scheduled to start in October, aimed to register over 8 million new users in 36 months. According to the joint order release, the firms mentioned above offer investors a written 100 percent cash back guarantee, which the order terms as fraudulent. Notably, the watchdogs also noted that they had disguised vital information; the risks posed by the project to potential cardholders, and how they make money from the capital employed.

Involved parties have 30 days to issue a response

According to the prohibition order, all the liquidity companies listed are under no obligation to sell securities in Texas or Alabama. Moreover, the firms allegedly used fake pictures to lure investors into the crypto credit card scam. The authorities have given all the involved firms a 30-days grace period to respond to the cease and desist order.