Labor Dept. Flip-Flops on Crypto in 401(k)s—Wall Street Shrugs

Regulators just pulled a 180 on retirement plans—dropping their crypto warning like a hot Bitcoin in a bear market.

After months of hand-wringing about ’volatility risks,’ the DoL quietly restored neutrality. Guess those pension-fund managers finally checked the 10-year ROI charts.

One hedge fund VP quipped: ’Next they’ll realize gold is just shiny rock with an Excel spreadsheet.’

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.