Senator Elizabeth Warren Leads Inquiry Into Fidelity’s Bitcoin-Backed Retirement 401(k) Account

In the wake of the launch of a Bitcoin-focused 401(k) account- a retirement plan- in the United States by Fidelity Investments, two Senators – Elizabeth Warren of Massachusetts and Tina Smith of Minnesota, have expressed concerns over the company’s latest products and this was contained in a letter to the firm’s Chief Executive Officer, Abigail Johnson.


As contained in the Senator’s letter, a demand was placed on Abigail to explain some of the inherent risks that are associated with the launch of the Bitcoin-backed product to American workers. The senators demanded that Fidelity clarify the risks involved in the 401(k) investments and how the company will address these risks.

Additionally, the Senators demanded to know how the firm will address the susceptibility of Bitcoin to manipulation as well as “the additional Bitcoin risks identified by DOL, including the challenge for plan participants to make (an) informed investment.”

Fidelity’s push to extend the investment into 401(k) was said to be based on growing demand from employees. Despite the firm clarifying that it will charge no fees for the service, the Senators still demanded to know if the proposed customers would need to worry about any fees at all.

In the prior announcement, Fidelity said it would only permit about 20% of a particular client’s portfolio to be invested in digital currencies, however, the claim of popular demand has mainly been faulted by the Senators who wrote;

“Despite a lack of demand for this option — only 2% of employers expressed interest in adding cryptocurrency to their 401(k) menu – Fidelity has decided to move full speed ahead with supporting Bitcoin investments.”

It is not uncommon to find some Senators expressing dissatisfaction about anything relating to Bitcoin, drawing on the fact that it is a Proof-of-Work (PoW) coin with a high Carbon footprint. With Fidelity’s investment offering now being questioned, time will show whether true organic demands fueled the launch of the product or not.

Image source: Shutterstock


Tagged : / / / / /

A Guy Put $10 in an Ethereum DeFi App, Then Filed a Lawsuit

Key Takeaways

  • A DeFi user has filed a lawsuit against Pool Together Inc. after depositing $10 in a pool of funds governed by a smart contract.
  • PoolTogether is a “no loss” lottery that lets users stake their tokens into savings pools for a chance to win a weekly prize.
  • The outcome of this case could set a precedent toward establishing a regulatory framework in the DeFi space.

Share this article

The plaintiff argues that PoolTogether occupies a regulatory “grey zone.”

PoolTogether Faces Lawsuit 

A new DeFi user with connections to Senator Elizabeth Warren is suing one of Ethereum’s earliest yield farming protocols.

PoolTogether Inc., a Delaware corporation linked to the blockchain based app PoolTogether, is facing a class-action lawsuit filed in New York federal court. The lawsuit was filed by a software engineer named Joseph Kent, a former technology lead for Warren’s 2020 presidential campaign. PoolTogether is a DeFi protocol that sells itself as a “crypto-powered savings protocol based on Premium Bonds.” It’s a smart contract on Ethereum that gives users the opportunity to win token prizes from the interest generated by the assets it pools. The protocol earns yield from farming the deposited tokens on other DeFi protocols. One of DeFi’s most widely used lending protocols, Compound Labs Inc., is also named in Mr. Kent’s suit.

The lawsuit comes after Mr. Kent deposited $10 worth of cryptocurrency in PoolTogether in October 2021. Kent has claimed that PoolTogether isn’t legally permitted to run prize-linked savings accounts His suit has been filed under a New York state law that lets a person who purchases an illegal lottery ticket bring a class-action lawsuit on behalf of themselves and other ticket-holders.

Under the law, defendants in these lawsuits are liable for as much as twice the amount that the entire class paid for their tickets. PoolTogether users have made deposits of at least $122 million, according to Mr. Kent’s lawsuit. 

In the traditional finance system, users are trusted to follow the law, and face punishment if they break the rules. DeFi operates differently as the rules are encoded in smart contracts that anyone can see. 

A Regulatory “Grey Zone” 

However, while crypto proponents profess that “code is law,” the DeFi space is largely unregulated. That’s part of what’s made the space a fertile ground for criminal activity through hacks, rug pulls, and smart contract exploits. Regulators have paid closer attention to the space as it’s grown over the past year; stablecoins, a key component of DeFi, have been the subject of intense scrutiny, not least in the U.S. (the SEC Chair Gary Gensler, Treasury Secretary Janet Yellen, and the Federal Reserve Chair Jerome Powell have all issued warnings about the technology in recent months, while Warren has taken shots at DeFi and the environmental impact of Bitcoin mining on multiple occasions). 

Kent’s lawsuit points to the alleged regulatory “grey zone” that PoolTogether occupies. Whether PoolTogether Inc. will come under fire depends on if the PoolTogether smart contract is classified as a managed investment scheme. Additionally, the case will also consider whether PoolTogether Inc. needed any territory-based permits to deploy a smart contract on the blockchain. As PoolTogether claims to be a “no loss” savings protocol, there is also an argument that the product can not be considered a lottery. 

Defending PoolTogether Inc. is Kevin Broughel, who has argued that the company doesn’t own or control the protocol; instead, he says its operations are governed by its original coding, which can only be changed by a majority vote of holders of its governance token, POOL. Broughel has also said that deposits don’t qualify as lottery entries.

While the case is still in its early stages, it could set an important precedent for the DeFi and cryptocurrency industry. The focus will be on who gets to decide what the rules of code are, and how much control smart contract coders have over their projects. In other words, it will try to determine whether DeFi is truly decentralized. 

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies. 

Share this article


Tagged : / / / / /

Bitcoin Only Works For The Wealthy, Senator Elizabeth Warren

The argument on who really benefits from bitcoin is a long one in the making. For those who have been invested in the digital asset for a couple of years, they have obviously been making the most profit given the recent rallies in the market. However, there is still a lot of BTC that remains in the possession of what is a small number of bitcoin users and that has led to some concerns regarding the distribution of the digital asset.

Majority Of BTC Held In 0.01% Of Wallets

It was reported a little over a week ago by the Wall Street Journal that only 0.01% of bitcoin holders held the majority of the asset’s supply. It revealed that about 5 million BTC were held in these wallets, leading to an even larger concentration in the distribution of the digital asset when compared to cash. Estimating the 1% of wealthy individuals in the U.S. controlled about 33% of the dollar supply.

Related Reading | Bitcoin Should Not Be Measured In Dollar Terms, Says Pompliano

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

This has sparked debate about if bitcoin is really the equalizer that it is purported to be. For one, there is only 10% of supply left to be mined over the next 120 years and the majority of the already circulating supply of the digital asset is being held by BTC investors who are currently very wealthy given the currently value of the cryptocurrency.

Bitcoin price chart from

BTC at $46K | Source: BTCUSD on

U.S. Senator Elizabeth Warren is one of those that has openly spoken out about this concentration. The senator does not believe that bitcoin, which is a completely decentralized ecosystem, equally benefits both the rich and the poor.

Get 110 USDT Futures Bonus for FREE!

Bitcoin Works For The Wealthy

In a recent tweet, Senator Elizabeth Warren called out bitcoin and crypto in general. She questions the financial inclusion that is pushed by the space and linked the WSJ article stating that the supply of BTC is heavily concentrated in a small percentage of wallets. She also points out the fact that it is an even higher concentration of the US dollar.

Related Reading | The Year In Review: An Emotional Rollercoaster For Crypto Investors

In conclusion, Senator Warren states that better solutions are needed to solve financial inclusivity. Pointing out that bitcoin only favors the wealthy.

Warren as at various times called for there to be more regulation in the crypto market. The senator has never been shy to air her anti-crypto views and has asked for there to be tighter restrictions placed on the market.

Featured image from Al Jazeera, chart from


Tagged : / / / / / / / / /

Finance Redefined: 83% of 7-figure Millennials own crypto, Sen. Warren criticizes DeFi, Dec. 10–17

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.

As the market attempted to recover from last week’s pummeling, decentralized finance (DeFi) was once again the topic of discussion in high-profile U.S. governmental offices. Read on to learn more about this news and much more from the world of decentralized finance.

What you’re about to read is the smaller version of this newsletter designed for brevity. For the full version of DeFi’s developments over the last week, drop your email below.