The U.S. Department of Labor (DOL) has officially rescinded its 2022 guidance that discouraged the inclusion of cryptocurrencies in 401(k) retirement plans. This change restores the DOL's neutral stance, allowing plan fiduciaries to consider cryptocurrency investments based on standard fiduciary principles under the Employee Retirement Income Security Act (ERISA).
Previously, the DOL's 2022 guidance advised fiduciaries to exercise "extreme care" when considering cryptocurrencies for 401(k) plans, a position that faced criticism for lacking a formal rulemaking process and for potentially exceeding the DOL's authority. The withdrawal of this guidance follows legal challenges and industry pushback, emphasizing the importance of adhering to established fiduciary standards without imposing additional restrictions on specific asset classes.
With this development, fiduciaries are now expected to evaluate cryptocurrency investments using the same prudent and diligent processes applied to other investment options, considering all relevant facts and circumstances to act in the best interests of plan participants.