Bitcoin Forum

New York Attorney General Letitia James in the bid to protect retirees from the dangers of investing in Crypto currencies, digital assets, digital tokens and digital coins has egged on  Congress to pass a law prohibiting crypto investments in retirement accounts.

Her point of concern is on the Individual retirement accounts(IRAs) and defined contribution plans, like 410(K0 plans and 457 plans for government workers, which has been the investment option for millions of Hardworking Americans after retirement. She sighted the recent development in financial institution where Bitcoin became an investment option in 410(k) plans, and other financial institutions expected to follow suit. With the recent downtimes in the crypto market and the market turbulence, Attorney General James  emphasised on the protection of workers' retirement funds and save them from the risk associated with cryptocurrencies.

Most of this retirees know absolutely nothing about how this digital assets work. The just trust this investment plans to make the right decision for them. Attorney General James is only been protective of her citizens to save them from the downtimes because the only depend on pensions for survival as such risking them on assets the can't control themselves can result to sudden death and heart failures. Because they will have to wait till the market becomes favourable to start making profit on their investments.

 link (https://ag.ny.gov/press-release/2022/attorney-general-james-urges-congress-protect-workers-prohibiting-retirement#:~:text=NEW%20YORK%20%E2%80%93%20New%20York%20Attorney,digital%20coins%2C%20and%20digital%20tokens.)

I have always thought that the management of retirement accounts should be very conservative as any significant loss could take years to recover, and if you are at the end of your career or you simply cannot work anymore then you are never getting that money back, so in principle I am not against the ban, however if they are banning bitcoin and other crypto then I hope they do the same with the many other financial instruments which are also very risky as a way to protect the retirement funds of workers.

This is a simple attack on liberalism and freedom. If the retiree has their sanity intact and can easily say that they want their funds to be turned fully into Shiba or any other shitcoin then they can, it's their own choice. It doesn't matter if it is a good decision or not, that is not the point of this, it is about being able to do what you want with your money. They are not doing anything illegal that hurts other people either, it's their own money and if they want to buy bitcoin with it then they can do it and nobody should be able to stop them. To say "its dangerous, we shouldn't allow them" is a breach of their freedom.

I would say it is a sane approach toward the safety and security of the funds! Retirement funds are different than any other form of investment. It has to be safe yet must provide a market-linked return. So I would support this cause!

Crypto assets are extremely volatile in nature. Young people who have time in hand, can surely invest in cryptos if they are able to get in and get out at a right time. That's the basis of crypto investment. Investors need to be extremely agile in nature. Retirement funds are usually not handled this way. So it's a very high-risk investment for retirement funds. 

Recently, news came out of Canada related to 95 million dollars of loss from FTX collapse. Crypto market has already seen a lot of collapses considering it is a relatively new type of investment. So it's better to keep for those people whose risk appetite is high.

Read here: https://www.reuters.com/technology/ontario-pension-says-any-loss-ftx-investment-have-limited-impact-2022-11-10/

if the ban is approved.. then no chance of a ETF or institutional level investments

because pension portfolios invest in literally all things stocks, bonds, shares, commodities..
so banning crypto from those markets as a "product" institutional level portfolio managers cant invest in. means bitcoin remains on the fringes and not mainstreamed.

this latest round of backlash is not about the bitcoin price volatility. its actually sparked by the investment in COMPANIES that manage crypto assets, where things like ETF is unregulated and so not protected by any government financial insurance system

the real solution is not to ban it.
but to ban then licence/permit it. meaning that to get a licence/permit to offer a product to investment plans, financial businesses offering crypto backed collateral products like an ETF share has to meet certain regulations..

I think it is important for every pensioners to know the areas that his pension savings is invested. Pension fund administrators should be able to educate their clients about their investment platforms and give them the opportunity to choose the sectors they want their funds to be invested. If the pension managers are investing in cryptocurrencies then these pensioners should be able to understand the risk that is involved and they should be given the privilege to choose if they want their funds to be invested in cryptocurrencies or not.

An outright ban is not the solution because the crypto space is very profitable sector. These retirees fund managers can genuinely make money from Bitcoin since pension is a long time investment. Considering the problems that some reputable exchanges are going through currently, there is need to supervise or regulate the activities of this pension managers. The government should enact sound policies to discourage them or bar from investing in some of these crypto Ponzi and get-rich-quick schemes. Some of these pension managers engage in reckless and risky crypto investment without considering the consequences. 
       

In the current world we live in, where phone scams are prevalent and the oldest generations are still extremely unsavvy when it comes to the internet, you have to fairly judge whether directing them into such investments is a wise decision. Traditionally as people enter retirement they should be in a position where their portfolio is almost entirely derisked - put into low paying but steady government bonds of the most reliable nature. Crypto however is the extreme opposition end of the "investment" spectrum and it makes sense to put some added protections in place to somewhat try and protect people from their own poor financial practices. It should not be banned entirely, but only very knowledgeble buyers should be in this space.

Just like the scammers we have leveraging the crypto space, this is a page out of there play book in a bid to protect them. It might seem unfair or should I say unfair as, they aren't given the chance to make investment decisions with there hard earned money, the motive isn't exactly out of place as it will protect them from scamees that tends to pry on the old, the emotionally unstable and ignorant minds of what is out there.  I can't really rule on this although, the better part of me tells me it isn't right but I think I can see the reason even though it isn't justified.

A poll in april of 2022 found 59% of new york residents believe they and their families would be better off if they left the state:


Pension plans must produce high growth to maintain value of wealth versus inflation. If inflation is 8% annually, pension plans must grow 8% just to break even. Logically, it makes sense to invest in high growth sectors of the economy like crypto to achieve this.

FTX is an extreme outlier case which shouldn't be considered to represent crypto as a whole. The entire timeline of FTX still makes zero sense and should never have happened if basic laws and regulations were followed. Its still a mystery as to how a long sequence of statistically improbable events aligned for FTX to occur the way it did. New york has always carried a fiercely anti crypto stance which has remained a stark contrast to the crypto friendly stance of states like texas and florida.

That's for sure related to what happened in Canada with retirees money swindled by FTX.

It's fair to think about the welfare of the retirees and on how they're going to spend well their pension. But, it's still up to them when they have the control of their funds.

Whether they'll spend it on a cruise, a vacation or into investing it on bitcoin. As long as the management of handling the money to them is good, next to it is their decision making and government shouldn't intervene with personal interest and actions.

In a way this is to protect them somewhat. Those people built whatever savings they have right now for a good few years, and if they aren't that experienced enough in handling these assets they'd see their money go down the drain in a very heartbreaking manner. While this seems controlling whatever they're trying to impose, it still puts the best interest of seniors and pensioners in mind. Still a better thing to do than let those savings go somewhere else these guys won't even enjoy, and perhaps at their age they shouldn't even bother investing at all.

I also suddenly remembered Ontario's pension case, my guess is that it is the main preference of the policy urge. It is not known whether retirees will be banned from using cryptocurrencies at all (including bitcoin), given the bankruptcy of some businesses and the impact this industry has had on the detriment of those investing in service-issued cryptocurrencies which have offered additional profit schemes in addition to natural utility growth.

It should be mentioned that they waited until the 2022 US election season was over, before proposing these harsh crypto regulation policies.

Knowing that they would be extremely unpopular with american voters.

Something that has been predicted for more than 6 months now.

Yes I read about this. The reason why is because due to all these exchanges failing and taking retirement money down with it, it’s not wise to invest.

I there are 2 sides to this. Depositing money on an exchange like FTX for these retirement funds is not smart. I would of preferred if they invested in the Bitcoin etf instead which is considered much more safe. Either way, it’s a diversified small amount. One sector goes down and another goes up. So it’s good for the retirement if they have different sectors of their investment, as long as it’s a small amount.

I don't know about liberalism, but it's definitely an attack on people's freedom to choose.  Funny enough, in another thread I wrote this:

And wouldn't you know, here we have an example of such a knee-jerk reaction.  I haven't read the details of this proposal, but I seriously don't think the government (which is taxing us to death and producing massive inflation) should be telling people how to invest their money.  Saying they're trying to protect people from the risks of crypto is a fucking joke.

Hear that, New York?  A fucking joke.

The reason are purely rational, cause to any genuine crypto trader/investor he/she will always advise to not involved a person with no idea on how the digital asset works or not to even agree to use the money of such a person with the agreement of trading for such persons due the the fact that should things go negative against plan there's no way you can explain to such a person about how his/her money was lost that they are going to understand not especially pensioners which hang their lives on their pension money.

So I believe the move is fair as to not drag many pensioners to their early grave should anything happens to their money through the financial  institutions.

Wouldn't it be better to let them know of crypto instead of outright banning it? It will protect them from crypto but pretty sure they can think for themselves, give them time to understand how crypto works and let them decide instead. It might even be more advantageous if they set up crypto investment plans together with regular investment plans instead.
With the case of FTX eating up retirement funds, well, that isn't even a crypto issue, it's just a centralized service fucking up and bringing down their customers with them, which can easily be avoided if one wants to.

I can understand that he wants to protect people from making bad decisions, but an outright ban on crypto currencies as retirement investment is wrong in my opinion. Even though a large part of the population might be unfamiliar with cryptos, there are still people who understand them and would like to have them in their retirement investment. Why can't there be better regulation to protect consumers instead of banning it directly? A good approach would be to make sure that everybody who wants to invest his retirement funds in cryptos is aware of the risks involved. In my country most of the private retirement schemes pool the money and buy investment funds with it. These investment funds have fixed guidelines for the assets they can buy. In most cases this is 60-80% fixed income, 20-40% stocks with only a very small fraction of 5-10% in commodities. To me it seems totally fine if we invest in a fund that would also add 5-10% crypto investments. These investment funds for our retirement are very long term investments that are not being traded too actively. Holding some cryptos for the next 30-40 years seems fine and we shouldn't worry about short term price fluctuations.  

I think those people already know crypto because they already have a crypto account. If there is one who must know and educate themselves more in crypto, that would be the one that will conduct a ban. They must know how useful crypto was, that it shouldn't be banned. Crypto helps protect people's money like for example in times of inflation. Cryptos are good for long term, especially for those who are working.

By the time, they want to retire their money have also grown a lot in crypto. Having a regular investment plan other than crypto is also a good idea. It works as a back plan in case something bad happens with our crypto investment even tho it's unlikely.

Indeed, in this case there are some things that do look like good things to do but when banning them as a whole is clear it is like putting a limit on the freedom to control what we have.
It's a very good goal indeed but would this pensioner accept that kind of thing. because I think everyone has their own desires and of course of the many retirees there, there must be some of them who want to be in bitcoin for the end of their lives.

These are very concerning and serious news. This law denies elders access to bitcoin adoption. It's the state controlling and saying what you can do and what you can't do with your own money. I understand some authorities may be worried after the several thefts ran this year by crypto CEOs against millions of customers, but it can't be used as an excuse to not allow retirement money to be used for bitcoin investment. There shouldn't be any issue if a retirement fund decided to acquire a cold wallet and store some btcs there by themselves.

Surely this is a sad thing, when people retire certainly hope to get additional income, and the best thing now is a cryptocurrencies investment, if it is the full right or money from retirees, the government should not limit or be banned if you want to enter Cryptocurrencies. If indeed the prosecutor's consideration is for the good of everyone, it is time not to limit anyone to invest in cryptocurrencies.

Due to the extremely volatile crypto market, the option to invest in bitcoin or altcoin does not seem like a good option for retirees. These investments are really risky and they need a long time, so retirees may not have time to get the profits that make their retirement comfortable. On the contrary, the market may continue. The downward trend for a long time, which will cause major crises for the retirees, both psychologically and financially, because they need more medicines and other medical expenses.
Whoever wants to invest in bitcoin should do so at the beginning of his life when he has plenty of time, so I see that this ban may really be in favor of retirees.

If you hear the reasons above, it seems that the prosecutor hopes that when it is old, he must be selective in using money, moreover the Cryptocurrencies case is very diverse and a lot, if a retired put money in Cryptocurrencies and then becomes a scam then he will become poor and will ask for help from the government, with pension money of course it is enough to meet the needs.

This is the perfect example of people being conformists and following trends.
When the Bitcoin/crypto prices are going up-Bitcoin/crypto is good. When the crypto prices are falling down-Bitcoin/crypto becomes bad.
We all know that cryptocurrencies are highly volatile risky assets, but investment plans like IRA could simply invest a small percentage of their portfolios  in crypto to lower the risk. Diversification exists for decades and this woman doesn't know anything about it.
It's like the big tech stocks dropping down by 90% and people wanting to ban investment funds from buying stocks of the big tech companies.
Why nobody wants to ban the investors from buying Meta stocks or Tesla stocks? When there's a bear market, crypto gets all the FUD and all the hate. The big tech corporations don't get nearly as much hate and FUD as crypto.

But how this can be helpful to save the people? As a basic investor's perspective the right time to invest is when the market is down so attorney concerned about increasing investors on cryptocurrencies due to the bearish looks like the fellow Americans understood the investment strategy and acting accordingly but now the power is trying to stop them from further progression and they want to keep majority in the same financial class forever. ::)

I also agree that this is fair. At least the ban will protect against some problems, for sure. Many retirees will easily succumb to the persuasion of scammers to buy bitcoins, but what's next? Loss of seed phrases, simply due to illness, as an option for future stress. Further, a lot of options are lined up on how to manipulate an elderly person. Yes, this probably sounds like a restriction of rights, but having elderly parents, any person can observe that not all of them remain in a good mind and memory until old age. In the end, if there are relatives nearby, the young can help with the purchase of bitcoins, and in the future insure the elderly.

What else should they entrust their retirement funds to, inflation ridden fiat currencies, or assets they absolutely have no idea what direction they will move to in the future?
 Bitcoin remains a better alternative for long-term investment. If you want an investment that is fairly inflation-proof for your retirement fund then buy and hold Bitcoin for a minimum of 3 year. It's better than most fiat currencies people rely on for retirements.

In regards to heartattacks in relation to investments risk, I would advice investors to only invest what they can afford to risk so they wouldn't be too attached to their Bitcoin investment, or the price of Bitcoin. Price fluctuations are normal in fiats too but people aren't too bothered, probably because they have no idea what it's all about or aren't paying attention...but  they feel the effects in the price of goods and services.    So, it's not just Bitcoin... The short-term investors probably should stop bothering the long-term ones. They should consider their hearts

They may claim it is to protect the retirees from losing their funds but the approach seem hash and look like an attack on their right. Perhaps they should have use another method to address these retirees and enlighten them on the possible danger of losing money if they have no idea what they are involved in. Anyone who still insist on investing will have to bear the consequences should there be any. These people are not children, there is no need to threat them as children.
 
 

I don't know whether it's fair or not for retirees but if they understand the risks behind investing in crypto and can accept it well, it will be the responsibility of each individual.
Those who receive their money through the salary system or their pension have the right to use their money for anything because it is their money.
But here, the government wants to protect the money they have and I think this needs to be discussed first between the government and pensioners so that there are no misunderstandings between them.
Or maybe the government could give freedom to retirees who want to invest in crypto using only 10%-30% of the pension they receive so that if there is a decline, it won't have too much of an impact on those pensioners.

Yes, that's right, I agree with that, it's better to take another approach than frankly prohibiting them from investing in cryptocurrency, even though the reason is to protect them because they don't know what cryptocurrency is. They can explain what cryptocurrency is, explain everything related to cryptocurrency including the risks they might face when the market is down. When they have done that, the decision is in their own hands, because I believe that what is meant by retirees are people who at least have the ability to understand what they are doing.

The NY state government has no business telling folks how to manage their IRA's as if they're children and need the government to come in and save them. Just another example of Bitcoin/crypto regulation under the guise of consumer protection.

Letitia James is also the Attorney General who promised to go after former President Trump and assured her constituency that she would go around fishing for a crime to charge him with. I believe Trump is facing civil liability in NY: https://ag.ny.gov/press-release/2022/attorney-general-james-takes-action-immediately-stop-donald-trump-and-trump

Nothing more than a radical politician that's throwing the book of law out the door for her own political interests.

I'm not really familiar with the stories of this Attorney General and her administration but I think she gave absolutely definite and positive reasons to her actions as this was for the good and betterment of this retirees.
You should know that at 60 years, one is supposed to relax and enjoy the fruits of their labour in form of pensions and gratuity and not battling with making investments that with distort their mental and emotional state of health.

Most of this crypto investment options are scams and people just looking for older people to prey on and at the end of the day, most of this retirees, when presented with options to double their investments rend to do so with other considerations and they find out at the end, get so depressed and thoughts of suicide comes in.

I ask a question to this. What about if the retirees decide to withdraw off the money in the retiree account to another account and take off everybody eye away from their money and do with it to their satisfaction including investing in bitcoin? I can understand the protection on the old people but they are not sick to decide to themselves on what they want and to do with the money from the labour of young age.

This is definitely valid point. In fact it's even not advisable to the new comers who do not even understand or take the efforts to understand how crypto space works and what are these tokens, their tokenomics, how they are associated with different roadmaps and pretty much all the stuff that we experienced after years of time spent into the crypto and specifically on this forum itself.

There is no point for elders who are retired and not willing to go through such messy studies. Even with the brokers it's big risk for them. I think the decision made by this juri is quality one and everyone must welcome it.

This is not about retirees making any deals, it's about their funds not being able to. This means that they give money to Mr.Smith or whoever, and that person buys stocks and gold and whatever with their money and they grow old and they retire and they use that money, the ban is about Mr.Smith not being able to buy bitcoin with that money for their future, this is not even just old people right now, it is also for people who are 20 years old right now and have 401k, because it means their funds can't be used to buy crypto.

Why do we think that crypto would be risky and bad whereas stocks are allowed? Stock market crashes all the time, it's not any less riskier.

There is no way this makes sense to me, this is like taking away someone’s fundamental Human right. I believe anyone that is a Retiree is definitely an adult and can make decisions on their own.

I understand the government also has the interest of its citizens at heart but they should make it optional, they is no safety in the financial ecosystem and that’s the truth even Fiat has its own risk on their citizens, so if a Retiree want a crypto-currency action they shouldn’t be deprived off that.

Not really that totally surprising that government does really love to make out involvement on lots of things specially into something which they do really like to get involved into.

Its true that this is really totally taking that full rights of those Retirees on what they should gonna do with their money on this case.Yes, we do understand on how government do really like to protect them but its not really that something that they should really make out some ultimatum or fixed decision.

Just like you do said that there should really be at least some choices for it to be optional.

If the bank only serves the customer accounts of retirees and customers withdraw all their money to other accounts. So what happens to the bank is that it goes bankrupt or has to close if there are no more customers saving money there because the bank has nothing else to serve.

I think my answer above is very suitable for the question you asked. But if it's a matter of someone's or everyone's decision in terms of investing in anything, I think it really depends on the decision of each of them in carrying it out, because it relates to the desire that is in their heart or whatever they have thought before.

Probably they just need a proper understanding on where they can put their retirement funds and I agree with the concern of security of the funds since cryptomarket is not perfect and can’t guarantee any return so there’s a risk of losing that retirement fund. So if you are a retiree, you should assess your financial capability and if you think you can afford to take such risk, then why not but if you are just going to depend with your retirement fund, i won’t suggest to put it in cryptocurrency.

As far as I can see, Attorney Letitia James has good intentions for retired people, she just doesn't want the pension amount to go to nothing in other cryptocurrencies that can destroy their money, this is my understanding.

But for retirees who have the knowledge, it may not be right to prevent them from investing in cryptocurrency or bitcoin if they have a deep idea of ​​Bitcoin or cryptocurrency. But I do not oppose these concerns of Letitia James.

I think this is unfair, let the retirement put money in Cryptocurrencies investment, if lucky then they can become millionaires, when there are limits for investment, of course this is felt unfair so that we are worth rejecting ideas like this, and Cryptocurrencies investment of course there is an opportunity for loss or Fortunately depends on the situation in the market.

They do deserve those retirement funds or money and it is really just right that they would be the ones to decide on what would be they doing into their funds.It is really just that government

do really love to have that involvement on how people on their control will really be spending up their funds.its not bad to have that in concern but totally trying out to hold into their neck most of the time.

Crypto investment doesnt assure or make sure that they would become millionaires but something that not bad an option if they would tend to invest on for their future
grandsons or family because they are old and its not really that important for them to mind much on keeping on more money.

Retirement funds are probably more delicate than others. They're not to be played with. I guess its risk tolerance should be set at a low level. I'm not very familiar with how retirement funds are usually invested, but if investing them could mean the loss of the only financial source for the survival of retirees, I guess I'd rather keep them away from very volatile assets as Bitcoin.

However, citing the case of FTX and Ontario as a solid reinforcement for this is probably wrong. It's not that it is very risky to bet on Bitcoin using retirement funds, it is almost a suicide to expose retirement funds to the likes of FTX and Celsius and others. If it's Bitcoin as in Bitcoin, meaning, without all the third parties and centralized platforms, it could have been avoided.

In my opinion the main factor is considered is the number of scam cases, things that are dangerous if a retirement is hit by a scam so that he loses money and cannot make money anymore, with the money that is there then it is considered sufficient without having to take risks with investment in cryptocurrencies, let's think positively by taking and think from a good side.

Banning is too strict, given that over time, Bitcoin does seem to grow in value, and there is no better long-term asset in terms of profits so far, which is very good for a retirement account. However, normally retirement plans should be about low-risk investments as far as I know, and Bitcoin isn't one of those. I think a better solution would be to oblige those retirement funds that invest in cryptos to do that only if a retiree agrees to it, and require performing an act of orally informing a retiree (and making it written in bold and with a big font in some sort of form one would have to sign) of the risk and high volatility of the asset.