DOL Says No to Crypto

Yesterday, the Department of Labor released a notice that they would be launching a program aimed at investigating retirement plans which offer crypto.

• The DOL says they have seen a rise in firms marketing crypto investments for 401K plans. Due to the increase, the Employee Benefits Security Administration will conduct this investigative program.
• Defined contribution plans usually offer a menu of investment options, such as individual stocks, ETFs, bonds, and/or annuities. Crypto is increasingly being added to these menus and the DOL is not only cautioning investors and plan participants but managers of such funds as well.
• The notice warns that the promise of outsized returns may cloud investor judgment & attract inexpert investors, reminding managers that they have a fiduciary responsibility that will not be passed on to plan participants.

Due to the early stage of the digital asset space, the DOL is concerned about the volatility and speculative nature of crypto. Custody of digital assets is another area of concern, as well as valuation. Finally, they reference the evolving regulatory framework as another reason to refrain from offering crypto as an option in these plans.