The U.S. Department of Labor (DOL) has officially rescinded its 2022 guidance that restricted the inclusion of cryptocurrency investments within 401(k) retirement plans. This previous directive, issued under the Biden administration’s mandate in March 2022, was characterized by the former administration as an overreach of authority. At the time, the guidance urged plan fiduciaries to exercise heightened caution when considering digital assets, citing the nascent stage of the cryptocurrency industry and associated risks such as fraud, theft, and capital loss.
The 2022 guidance referenced concerns from the Securities and Exchange Commission (SEC), highlighting the speculative nature of crypto investments along with challenges related to record-keeping, valuation, and safeguarding assets. Additionally, regulatory uncertainties surrounding cryptocurrencies complicated fiduciaries’ compliance efforts. Although a federal judge dismissed a lawsuit challenging this guidance in 2023, the Department of Labor’s stance on cryptocurrency remained unchanged.
In its newly issued statement, the DOL acknowledged that the 2022 guidance deviated from the requirements stipulated by the Employee Retirement Income Security Act (ERISA) and has now restored its longstanding neutral, principles-based policy. The department clarified that it neither endorses nor opposes cryptocurrency investments, instead delegating the decision-making authority to plan fiduciaries to determine whether to incorporate digital currencies into their retirement portfolios. U.S. Secretary of Labor, Marty Walsh, criticized the prior administration’s guidance as an overextension, emphasizing that investment decisions should rest with fiduciaries rather than bureaucrats. This policy reversal aligns with broader efforts to foster the growth of the U.S. cryptocurrency market and position the country as a global hub for digital asset innovation.
For further details, the full report is available here: https://bitcoinist.com/us-department-of-labor-rescinds-2022-guidance-against-crypto-investments-for-retirement-plans/
