US politicians propose legislation to ease restrictions on crypto investments

Four Republican senators have co-sponsored a measure prohibiting the U.S. Department of Labor from prosecuting persons “using brokerage windows to invest in crypto.”

Senator Tommy Tuberville of Alabama has presented legislation that would permit cryptocurrency exposure in 401(k) retirement plans.

In a 15-Feb release, Tuberville said that the Financial Freedom Act, which he initially proposed to the U.S. Senate in May 2022, aims to alter the Department of Labor’s 401(k) regulation prohibiting crypto investments. According to the senator, the measures would prohibit the DOL from conducting regulatory proceedings against persons who “use brokerage windows to trade in cryptocurrencies.”

“Tuberville said that the federal government should not choose winners and losers in the investing game. I want everyone who works for a living to be able to save and invest for their future in whichever way they see appropriate, and my bill would make that possible.”

Senators Cynthia Lummis, Rick Scott, and Mike Braun have signed on as co-sponsors of the measure. Lummis said in a December 2022 interview that she was “quite comfortable” with U.S. investors holding Bitcoin in their retirement plans after the fall of crypto and the bankruptcy of big enterprises such as FTX, Voyager Digital, and Celsius Network.

Politico reported on February 14 that Florida Congressman Byron Donalds intended to file a similar measure in the House on February 17. Donalds and Tuberville, both members of the Republican Party, may encounter pushback from the Democratic Party. Democratic Senator Elizabeth Warren has already voiced reservations about Fidelity Investments’ intentions to integrate Bitcoin in 401(k) accounts.

The March 2022 DOL warning advised 401(k) account holders to “exercise extreme caution” while investing in cryptocurrencies due to the possibility of fraud, theft, and loss of cash. 

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