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US Sees Launch Of First Company Sponsored Bitcoin Retirement Plan

US Sees Launch Of First Company Sponsored Bitcoin Retirement Plan

Digital Asset Investment Management, or DAiM, stands as an asset manager based within the US. As it stands now, the manager has launched the first-ever employer-sponsored 401(k) retirement plan supporting Bitcoin within US soil.

Breaking New Grounds For US

DAiM made an announcement on the 19th of November, 2020, stating that it will serve as a fiduciary and advisor when it comes to helping companies create their own 401(k) plans. In particular, it offers help in developing plans that offers a number of recommended model portfolios of varying levels of risks. These plans can tie it to traditional assets with up to 10% in Bitcoin allocated in it.

The BTC in question will be held by Gemini Trust in cold storage. Through doing so, DAiM is capable of transferring the bitcoin to former-employees, as well, as they don’t need to be working with participating companies to gain it.

A New Era For Retirement Plans

It should be noted, however, that these crypto-friendly plans DAiM is setting out still stands compliant with the Employee Retirement Income Security Act of 1974. Employers will be able to offer this new plan from the year 2021, as well.

US citizens have long since been able to include crypto assets into their respective 401(k) rollover accounts, individual retirement accounts, and brokerage accounts. They could do this since 2018, when the Internal Revenue Service (IRS) had started taxation on Bitcoin.

Adam Pokernicky stands as the COO of DAiM, and gave a statement about the matter at large. He explained that offering Bitcoin within Company-based plans had been impossible until this point. He highlighted that an old 401(k) plan could easily be converted to an IRA when someone leaves an employer or job, investing in Bitcoin from there. Until recently, however, the only way to invest in Bitcoin while working at a company is either quitting your job wholesale or taking a severe penalty.

Too Much Red Tape In US Crypto Regulation

Traditional wealth management industries have always been slow to warm up to the idea of Bitcoin, Pokernicky noted. He highlighted how there aren’t many investment advisors to speak of currently offering regulated, licensed access to Bitcoin directly to retirement and brokerage accounts.

As for why the sector was so reluctant, Pokernicky blamed the massive regulatory red tape within the US when it comes to crypto compliance. To prove his point, he highlighted that DAiM needed a full year of slow-building to get the right approvals needed to offer this new service.

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      A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.

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