U.S. Labor Department Reverses Crypto Restrictions for 401(k) Plans

The U.S. Department of Labor has rescinded its 2022 guidance discouraging cryptocurrency investments in 401(k) retirement plans, marking a notable shift in federal policy. The move returns decision-making authority to plan fiduciaries, aligning with the neutral framework of the Employee Retirement Income Security Act (ERISA).

Critics had argued the previous directive—which urged "extreme care" when considering crypto assets—overstepped regulatory boundaries. "Investment decisions should be made by fiduciaries, not D.C. bureaucrats," said Labor Secretary Lori Chavez-DeRemer, signaling a rollback of what some viewed as administrative overreach.

The Biden administration had previously taken a hardline stance, warning that digital assets posed "significant risks" to retirement savers. This policy reversal comes as institutional adoption of cryptocurrencies gains momentum, though regulatory clarity remains fragmented.