Employee Benefits Security Administration (EBSA) Rescinds Prior Guidance Limiting 401(k) Plan Investments in Cryptocurrencies
Since March of 2022, the Department of Labor (DOL) operated under the guidance of the Compliance Assistance Release No. 2022-01 regarding 401(k) plan investments in cryptocurrencies and other digital assets marketed as tokens, coins, crypto assets, and any derivatives thereof.
On May 28, 2025, the Employee Benefits Security Administration (EBSA) announced the decision to rescind the 2022 guidance in full.
Serious Concerns About Cryptocurrency
The 2022 release stated, “The Department has serious concerns about the prudence of a fiduciary's decision to expose a 401(k) plan's participants to direct investments in cryptocurrencies, or other products whose value is tied to cryptocurrencies. These investments present significant risks and challenges to participants' retirement accounts, including significant risks of fraud, theft, and loss ….”
The 2022 release warned plan fiduciaries to exercise "extreme care before they consider adding a cryptocurrency option to a 401(k) plan's investment menu for plan participants." The standard of "extreme care" announced in the 2022 release is not found in the Employee Retirement Income Security Act (ERISA) and differs from the act’s ordinary fiduciary principles.
Returning to a Neutral Approach
ERISA only requires that a fiduciary select a plan's investment menu "with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims" for the "exclusive purpose" of maximizing risk-adjusted financial returns to the plan's participants and beneficiaries.
Before the 2022 release, the DOL usually took a neutral approach to particular investment types and strategies. Today's release restores that approach by neither endorsing, nor disapproving of, a plan fiduciary’s decision to include cryptocurrency in a plan's investment menu.
In other words, the DOL’s current policy is that when evaluating any particular investment type, a plan fiduciary's decision should consider all relevant facts and circumstances and will "necessarily be context specific," applying the statutory standards in ERISA.
