US Labor Dept Softens Crypto Warnings for 401(k) Plans—Wall Street Still Won’t Get It

Regulators blink as digital assets claw into retirement portfolios.

After years of dire warnings, the DoL quietly dials back its anti-crypto stance—just as institutional players start stacking sats. Guess those ’risky, volatile’ assets aren’t so scary when BlackRock comes knocking.

Bonus jab: Meanwhile, your financial advisor still thinks Bitcoin is a ’fad’ while recommending you load up on 2% yield bonds.

Neutrality restored 

The Department now reverts to a neutral stance that adheres to the statutory language of the Employee Retirement Income Security Act (ERISA), which governs private-sector retirement plans.

In a statement, the Employee Benefits Security Administration acknowledged that the “extreme care”had no statutory basis in the law and departed from the department’s prior principles-based approach. 

US Secretary of Labor Lori Chavez-DeRemer said:

While the Department’s announcement does not endorse or disapprove of crypto as retirement plan assets, it makes clear that investment discretion belongs to fiduciaries under ERISA. 

The statement reiterates that fiduciaries must still comply with statutory obligations to act in the best interest of plan participants. Still, that determination must follow a consistent evaluative framework, not asset-specific cautionary directives.

Departing from ERISA precedent

On March 10, 2022, the Department released a compliance notice that warned plan fiduciaries against adding crypto investment options without heightened scrutiny. 

The document flagged crypto’s volatility, custodial complexities, and regulatory uncertainty as grounds for caution, applying a threshold that critics argued exceeded the fiduciary duty standard defined under ERISA.

Historically, the Department maintained a neutral stance on specific asset classes, instead requiring fiduciaries to evaluate options based on risk, cost, and suitability in relation to plan objectives. 

The 2022 release diverged from that tradition by singling out crypto as warranting special caution, despite ERISA’s requirement that fiduciaries act “with the care, skill, prudence, and diligence under the circumstances then prevailing.”

The Department’s revised guidance affirms that investment decisions must remain context-specific and grounded in a prudent review of all relevant factors.

By eliminating Compliance Release 2022-01, the Department reestablishes a uniform application of fiduciary principles under ERISA, allowing retirement plan administrators to assess crypto investment options on a case-by-case basis in line with existing legal obligations.