In 2022, the Department of Labor (DOL) issued guidance regarding 401(k) plan investments in cryptocurrencies. This guidance warned plan fiduciaries to exercise "extreme care" when considering cryptocurrency investments in 401(k) plans and generally discouraged cryptocurrency in plan investment options.
On May 28, 2025, the DOL issued further guidance rescinding the prior 2022 guidance in full.
A Quick Summary of the 2022 Guidance
The 2022 release directed plan fiduciaries to exercise “extreme care” before considering adding a cryptocurrency option to a 401(k) plan's investment menu for plan participants. The guidance indicated that fiduciaries may not shift responsibility to plan participants to identify and avoid imprudent investment options, and failure to remove imprudent investment options is a breach of duty. The DOL expressed serious concerns about the prudence of a fiduciary's decision to expose a 401(k) plan's participants to direct investments in cryptocurrencies. They indicated that these offerings present significant risks and challenges to participants' retirement accounts, specifically that they are speculative and volatile investments and that the regulatory environment for cryptocurrencies is generally underdeveloped.
Understanding the Change
Last week's decision to rescind the 2022 guidance does not constitute an endorsement for the inclusion of cryptocurrency investments in 401(k) plans. Instead, this new release restores the DOL’s historical approach by neither endorsing nor disapproving of plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan's investment menu is appropriate.
Implications for Plan Fiduciaries
The rescission of the 2022 guidance puts the onus back onto plan fiduciaries whether to consider cryptocurrency investments in 401(k) plans. Fiduciaries must still adhere to the standards set forth by the Employee Retirement Income Security Act (ERISA), ensuring that any investment option is prudent and in the best interest of plan participants.
Vita’s View
The team at Vita still advises extreme caution in considering any cryptocurrency investment options in 401(k) plans.
References
Compliance Assistance Release No. 2022-01
Compliance Assistance Release No. 2025-01
