On May 28, 2025, the U.S. Department of Labor (DOL) released Compliance Assistance Release No. 2025-01, which rescinds prior 2022 guidance that cautioned plan fiduciaries to exercise “extreme care” before they considered adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.
According to the DOL, the standard of “extreme care” deviated from the requirements of the Employee Retirement Income Security Act (ERISA). Under ERISA, fiduciaries must act prudently and solely in the financial interests of plan participants, among other standards of conduct.
The DOL further stated that the prior guidance marked a departure from the agency’s historically neutral, principle-based approach to fiduciary investment decisions. In a news release, the DOL explained that rescinding the 2022 guidance “reaffirms its neutral stance [by] neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate.”
Action Steps:
- The DOL guidance aligns with the Trump administration’s efforts to promote the U.S. cryptocurrency industry, although it is unclear whether other regulatory actions will follow.
- Plan fiduciaries who oversee or allow investments in any digital assets should continue to closely monitor developments in this area and consult with their benefit advisors to ensure full compliance with ERISA’s fiduciary responsibilities.