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crypto.news 2025-05-28 15:34:32

Labor Dept. backs off crypto warning, restores neutral stance on 401(k)s

The U.S. Department of Labor on Wednesday rescinded its 2022 directive that had discouraged retirement plan fiduciaries from offering cryptocurrency as an investment option in 401(k) plans. The department is calling the earlier guidance a deviation from established legal standards under the Employee Retirement Income Security Act. The Employee Benefits Security Administration issued Compliance Assistance Release No. 2025-01, which formally withdraws the 2022 release that instructed fiduciaries to exercise “extreme care” before considering crypto offerings. The department now says that language was inconsistent with ERISA and represented a shift from its historically neutral approach to investment types. “The Biden administration’s Department of Labor made a choice to put their thumb on the scale,” Secretary of Labor Lori Chavez-DeRemer said in a statement. “We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.” You might also like: Vietnam busts $400m crypto scam running fake exchange Crypto regulation in retirement plans The 2022 guidance had warned that offering crypto in retirement plans could trigger regulatory scrutiny, and that fiduciaries should expect to be questioned on whether such options aligned with their duties of prudence and loyalty. It came amid broader concerns about the volatility and nascency of digital assets. The Labor Department said it is reaffirming its “neutral stance” and will not take a position for or against fiduciaries who determine that cryptocurrency is appropriate for a plan’s investment menu. Investment decisions, the department said, remain “context specific,” echoing the U.S. Supreme Court’s standard in Fifth Third Bancorp v. Dudenhoeffer . The withdrawal does not guarantee regulatory approval of crypto in retirement plans, but it signals a return to evaluating all investment options under the same fiduciary lens, without singling out any particular asset class for heightened scrutiny. You might also like: RedStone powers RWA access on Solana with Drift integration

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