As Bitcoin and other cryptocurrencies continue to tank, new struggles between the Biden Labor Department and Fidelity Investments begin to start up. Fidelity Investments has let retirement savers add Bitcoin to their 401(k)s and the Biden Labor Department, which polices employer-sponsored 401(k)s, has begun sending warnings to Fidelity that their addition of volatile crypto assets can put future retirements into grave danger.

Senator Elizabeth Warren of Massachusetts has questioned the company’s CEO about putting investors on the front lines of a “risky and speculative gamble.” In a surprising twist of events, Republicans are rushing to defend Bitcoin as a much-needed retirement asset class. Senator Tommy Tuberville of Alabama even went as far as to propose legislation that would prevent the Biden Labor Department from restricting options available to employees in self-directed retirement accounts.

“The atmospherics - the YOLO and the FOMO of cryptocurrency - are our concerns. Right now, you don’t know whether you’re betting on the winning horse or not. It’s very speculative.”

Ali Khawar, Labor Department Acting Assistant Secretary, said.

Going against the backlash of American politicians, Fidelity continues ahead with the initiative to have Bitcoin available as a retirement asset. 23,000 companies currently use Fidelity for their employees’ retirement, AARP, and consumer advocates also sound the alarm for the addition of crypto.

“It’s very difficult to separate the facts from the hype - and there’s a lot of hype. Offering these assets to plan sponsors to include in their lineups could be increasing their liability, and that’s not good for anybody. It’s not good for small businesses … it’s not good for their employees.”

Micah Hauptman, director of investor protection at the Consumer Federation of America, said.

Fidelity has developed a digital asset platform including everything from Bitcoin-backed mutual funds to custodial services for investors. Fidelity has also created the Crypto Council for Innovation with fintech startups-turned-powerhouses Block and CoinBase.

In March, retirement plan administrators were said to be vulnerable to investigations if they were to invest their employees’ defined contribution plans into digital assets. Other investments, such as collectibles and certain precious metals are also prohibited. The Department of Labor claims it has “serious concerns about the prudence” in terms of digital asset investments.

Eric Sandwen, a Fidelity spokesperson, said that Bitcoin is not yet planned as an option in any 401(k)s where Fidelity acts as a fiduciary. Dave Gray, Fidelity’s head of workplace products and platforms, urged the Labor Department to rescind its guidance or revise it. Fidelity’s Bitcoin 401(k) offering leaves the decision-making to individual employees who opt into the program through their employer.

The warning is given in part because of the lack of clarity on how digital assets will be regulated as well as concerns surrounding scams, market manipulation, and other fraud according to Khawar.

“We don’t know what regulatory changes are going to happen in this market, and who’s going to adapt to them better or worse. Even if you are a strong proponent of cryptocurrency, I don’t think anyone has any certainty that Bitcoin itself is going to be the coin that succeeds in ways that others don’t.”

Khawar added.

AARP has argued recently that the downturn of cryptocurrencies is evidence that digital currency is too dangerous for retirement planning. David John of AARP said “It is a horrible mistake to use crypto assets [for retirement plans]. The last week to 10 days or so proved that point for us.”

The senators against Fidelity’s push forward (Elizabeth Warren and Senator Tina Smith) said “In short, investing in cryptocurrencies is a risky and speculative gamble, and we are concerned that Fidelity would take these risks with millions of Americans retirement savings.”

After the criticism from these two senators, another Senator, Tommy Tuberville, introduced the “Financial Freedom Act” which prohibits the Labor Department from restricting the types of investments permitted in self-directed 401(k) accounts.

“The government has no business standing in the way of retirement savers who want to make their own investment choices. When you’ve earned your paycheck, how you invest your money should be your decision. My legislation makes sure that is the case.”

Senator Tommy Tuberville said.

As for Fidelity and their urge to move forward with Bitcoin being implemented as a retirement investment, Sandwen said that there are consumer safeguards in place including “excessive trading oversight, transparency, education, and cybersecurity features.” Sandwen added, “Fidelity looks forward to continuing the dialogue on this exciting offering with federal regulators and policymakers consistent with our approach to many new services we offer our customers.”