Janet Yellen, U.S Treasury Secretary, has sent out a warning against crypto’s exposure in the 401 (k) retirement plans by asking Congress to intervene.
Fidelity and many other global financial institutions have been working on providing investment services for retirement plans. Boston-based Fidelity, for instance, had announced in April the inclusion of crypto options in its retirement plans, but Yellen opposes these plans.
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When asked about Fidelity’s plans of getting crypto exposure to retirement plans, Yellen objected to this project, saying that cryptos are a precarious choice for retirement plans, especially for average savers. She said she would not recommend the plan to any person saving for retirement.
The U.S. Labour Department officials also supported this objection during an event organized by New York Times on Thursday, 9th June.
Regarding the Congressional action, Yellen also said that it would help if Congress regulated the cryptocurrency to be included in the tax-favored retirement vehicles.
Retirement Accounts get washed out in Crypto’s Security Breach
Gemini crypto exchange faced a tremendous security breach in February. The breach led to the loss of $36 million directly from retirement accounts.
The press release reports that IRA Financial Trust, a platform responsible for the management of retirement and pension accounts, has sued Gemini for failing to be careful in protecting the crypto holdings of their investors.
The lawsuit had revealed that Gemini did not take immediate action when IRA notified it concerning the breach. The exchange did not freeze accounts early enough. The delay allowed criminals to go on transferring funds out of the investors’ accounts leading to a significant loss.
Gemini is in denial of the allegations. With this in mind, suspicions have arisen on whether security to deal with such theft is enough. Measures should be implemented to ensure that people’s retirement funds are safe.