In the wake of the collapse of FTX, and amid ongoing turmoil in the crypto sector, New York state attorney general Letitia James called on lawmakers to ban crypto from investors’ retirement accounts.
Major financial institutions have begun adding crypto as investment options in retirement plans, and a couple of pieces of legislation have been proposed that would prevent regulators from intervening to restrict these investments.
However, citing recent volatility in the crypto sector, James stressed the need to protect workers’ retirement funds.
“Investing Americans’ hard-earned retirement funds in crashing cryptocurrencies could wipe away a lifetime’s worth of hard work,” she said in a statement.
James stressed that recent high-profile failures (such as FTX, and before that, Voyager Digital and stablecoin, TerraUSD — which have had knock-on effects for the sector as a whole) make digital assets “unsuitable” as retirement investments.
Moreover, crypto prices are highly volatile as their value is driven entirely by speculation. These assets are often used in financial crime, and the sector is largely unregulated, James noted.
“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,” she said. “I urge Congress to take action to protect working families from having their retirement accounts dry up because of crypto investments.”