facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
%POST_TITLE% Thumbnail

Do You Want Cryptocurrency As a 401(k) Investment?

Column distributed by Hearst Connecticut Media Group.

Links to resources referenced:

  • U.S. Department of Labor – Employee Benefits Security Administration: Compliance Assistance Release No. 2025-01
    • https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/compliance-assistance-releases/2025-01 
      • Related column excerpts:
        • “One possible roadblock to keep the 401(k) option from becoming reality was removed after the Department of Labor’s Employee Benefits Security Administration (EBSA) issued Compliance Assistance Release No. 2025-01 in late May.”
        • “Quoting the 2025 release, the standard of ‘extreme care’ is ‘not found in the Employee Retirement Income Security Act (ERISA) and differs from ordinary fiduciary principles thereunder.’” 
        • “What is the ERISA standard? As noted in a footnote in the 2025 release, the requirement is that ‘a fiduciary curate 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.’”
  • U.S. Department of Labor – Employee Benefits Security Administration: Compliance Assistance Release No. 2022-01
    • https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/compliance-assistance-releases/2022-01
      • Related column excerpts:
        • “The new release rescinded a 2022 communication (Compliance Assistance Release No. 2022-01) that cautioned retirement plan fiduciaries ‘to exercise extreme care before they consider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 2022 EBSA guidance on cryptocurrency said that ‘[c]ryptocurrencies are often promoted as innovative investments that offer investors unique potential for outsized profits. These investments can all too easily attract investments from inexpert plan participants with great expectations of high returns and little appreciation of the risks the investments pose to their retirement investments.’”
  • U.S. Department of Labor: “US Department of Labor rescinds 2022 guidance on Cryptocurrency in 401(k) Plans”
    • https://www.dol.gov/newsroom/releases/ebsa/ebsa20250528
      • Related column excerpt:
        • “By rescinding the 2022 guidance, the Labor Department ‘reaffirms its neutral stance, neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate.’ U.S. Secretary of Labor Lori Chavez-DeRemer added in the press release that the department was ‘making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.’”
  • Yahoo! Finance: Bitcoin USD Price
  • FINRA: Investment Products – Crypto Assets
    • https://www.finra.org/investors/investing/investment-products/crypto-assets 
      • Related column excerpts:
        • “While FINRA states in ‘Crypto Assets’ that ‘All investments carry risks, and crypto assets are no exception,’ it adds that ‘Crypto assets have experienced higher levels of volatility relative to more traditional investment assets, meaning that price swings -- and any investment value -- may go up and down dramatically and unpredictably, and the risk of losing all of your investment is significant.’ Read FINRA’s articles ‘Bitcoin Basics’ and ‘Crypto Assets.’ FINRA (the Financial Industry Regulation Authority) regulates member brokerage firms doing business in the U.S.”
  • FINRA: Avoid Fraud – Bitcoin Basics
    • https://www.finra.org/investors/insights/bitcoin-basics
      • Related column excerpt:
        • “While FINRA states in ‘Crypto Assets’ that ‘All investments carry risks, and crypto assets are no exception,’ it adds that ‘Crypto assets have experienced higher levels of volatility relative to more traditional investment assets, meaning that price swings -- and any investment value -- may go up and down dramatically and unpredictably, and the risk of losing all of your investment is significant.’ Read FINRA’s articles ‘Bitcoin Basics’ and ‘Crypto Assets.’ FINRA (the Financial Industry Regulation Authority) regulates member brokerage firms doing business in the U.S.”
  • U.S. Government Accountability Office -- 401(k) Plans: Industry Data Show Low Participant Use of Crypto Assets Although DOL’s Data Limitations Persist
    • https://www.gao.gov/products/gao-25-106161
      • Related column excerpt:
        • “A U.S. Government Accountability Office report released to the public in December of 2024 found that available industry data and stakeholder interviews suggested that ‘crypto assets are a small part of the 401(k) market.’ It also cautioned that ‘GAO’s analysis of investment returns indicates crypto assets have uniquely high volatility -- a measure of their riskiness to participants -- and their returns can come with considerable risks.’” 
  • National Day Archives: National 401(k) Champion Day / Jun 15