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(Kitco News) – Investment giant Fidelity has launched new retail cryptocurrency trading accounts, delving deeper into the troubled cryptocurrency ecosystem despite objections from US lawmakers.
“Fidelity Crypto is your way to buy and sell bitcoin and ethereum in the Fidelity Investments App,” the company says on its website, promising customers “the ability to trade crypto for less than $1, while also having an integrated look to your traditional cryptocurrencies. and cryptocurrency investments.”
In early November, Fidelity announced plans for the platform and offered customers the opportunity to join an early access list. “Where our clients invest is more important than ever,” Fidelity said. “A significant number of Fidelity customers are already interested in and own cryptocurrency. We provide them with the tools to support their choices so they can benefit from Fidelity’s education, research and technology.”
From launch, the only cryptocurrencies available for trading on the Fidelity Crypto platform will be bitcoin and Ethereum, but Fidelity wrote that “additional cryptocurrencies are being evaluated to expand trading capabilities over time.” Fidelity Crypto accounts will not be able to receive or send cryptocurrency transfers from the launch date.
The platform promises “commission-free” cryptocurrency trading, but the company said “a 1% spread will be factored into the execution price of each trade.” Fidelity said that 1% is the maximum rate and they can choose to apply a lower spread percentage or no spread at first.
Fidelity Crypto will currently be available in 35 US states, including California, New York, Texas, Florida, Massachusetts, Pennsylvania and New Jersey. Customers living in states where it is not yet available can add their name to the early access list to be notified when the platform is approved.
Fidelity Crypto’s launch comes at an awkward time, as the cryptocurrency winter saw the value of blockchain-based assets shrink from $2.9 trillion in total market cap to $820 billion today, and the contagion of the recent FTX crash is making the cryptocurrency even worse.
After Fidelity announced a plan in April to allow 401(k) holders to allocate 20% of their retirement savings to Bitcoin (BTC), lawmakers in the US condemned the move.
On Nov. 21, Sens. Richard Durbin, D-Ill., and Elizabeth Warren, D-Mass. and Tina Smith, D-Minn. Fidelity Investments has sent a letter to CEO Abigal Johnson asking the firm to reconsider its decision to allow pension plan participants to invest in cryptocurrency.
“Fidelity Investments has opted to expand beyond traditional finance and into the highly volatile and increasingly risky digital asset market,” the senators said. “The recent implosion of cryptocurrency exchange FTX has made it clear that the digital asset industry is in serious trouble.”
The senators called on Fidelity to “do what is best for plan sponsors and plan participants – seriously reconsider the decision to allow plan sponsors to have Bitcoin exposure to plan participants.”
They cited the increasingly “volatile, volatile and chaotic” nature of the cryptocurrency market in 2022 as the reason for their demand. Because Durbin is the No. 2 Democrat in the Senate as Majority Whip, Smith and Warren because they are on the Banking Committee, the trio wields considerable influence on financial matters.
New York Attorney General (NYAG) Letitia James sent a letter to members of Congress on November 22 asking them to draft laws banning cryptocurrency investments in defined contribution plans and individual retirement accounts (IRAs).
James also called for the rejection of the recently proposed Retirement Savings Modernization Act and the Financial Freedom Act of 2022, which were designed to allow investment in digital assets.
The AG specifically cited the Terra/Luna meltdown and the FTX explosion as examples of threats it seeks to protect investors.
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