U.S. Department of Labor Reverses Stance on Crypto in 401(k) Plans

In a surprising move, the U.S. Department of Labor just flipped the script on its 2022 guidance that had been chilling crypto's inclusion in retirement plans. They've yanked back the old directive that had fiduciaries spooked about offering cryptocurrency in 401(k)s.

The department's calling out the previous guidance as a wild deviation from the legal norms set by the Employee Retirement Income Security Act. Yeah, they're saying it was way off base.

The Employee Benefits Security Administration didn't mess around—they dropped Compliance Assistance Release No. 2025-01, officially pulling the plug on that 2022 release. You know, the one that told fiduciaries to tread with "extreme care" around crypto. Gone!

Now, the department's saying that old language was totally out of line with ERISA and a sharp turn from their usual chill stance on different investment types.

Secretary of Labor Lori Chavez-DeRemer didn't hold back: "The Biden administration’s Department of Labor made a choice to put their thumb on the scale," she declared. "We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats."

Crypto regulation in retirement plans

Back in 2022, the guidance had everyone on edge, warning that throwing crypto into retirement plans could trigger a regulatory crackdown. It was telling fiduciaries to brace themselves for tough questions on whether crypto vibes with their duties of prudence and loyalty.

This all went down while everyone was still wrestling with the wild swings and newness of digital assets.

Now, the Labor Department's shouting from the rooftops about going back to their "neutral stance." They're not picking sides on whether fiduciaries should or shouldn't dive into crypto for their plan's menu.

They're sticking to their guns that investment calls are all about the context, nodding to the U.S. Supreme Court's take in Fifth Third Bancorp v. Dudenhoeffer.

Pulling back this guidance doesn't mean crypto in retirement plans gets an automatic green light, but it's a clear signal they're back to treating all investments the same under that fiduciary microscope, without giving any asset class the side-eye.