DOL Resets Stance to ‘Neutral’ on Crypto Options in 401(k) Plans

The Department of Labor rescinded on Wednesday previous guidance that directed plan fiduciaries to exercise “extreme care” before adding cryptocurrency to investment menus.

A March 2022 compliance assistance release by the administration of former President Joe Biden “deviated from the requirements of the Employee Retirement Income Security Act and marked a departure from the department’s historically neutral, principled-based approach to fiduciary investment decisions,” according to Wednesday’s release from the current DOL’s Employee Benefits Security Administration.

In rescinding the 2022 guidance, President Donald Trump’s DOL stated it intends to reaffirm a neutral stance by neither endorsing nor disapproving of plan fiduciaries that include cryptocurrency in their plans’ investment menu.

In April, the DOL signaled that it was weighing whether to rescind its Biden-era rule that permits retirement plan fiduciaries to consider environmental, social and governance factors when selecting investments.

Under Biden’s ESG rule, retirement plan fiduciaries were not required to consider ESG factors when selecting investments but were permitted to use ESG considerations as a “tiebreaker” when two options offer equivalent return rates.

Reversing the guidance regarding cryptocurrency continued the trend of reversing course on the previous administration’s policies.

“The Biden administration’s Department of Labor made a choice to put their thumb on the scale,” said U.S. Secretary of Labor Lori Chavez-DeRemer in a statement. “We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.”

At the time of the 2022 guidance, the EBSA of the Biden administration stated that cryptocurrencies were speculative and volatile investments, leading the agency to raise concerns about a fiduciary’s decision to expose 401(k) plans’ participants to direct investments in cryptocurrencies. The guidance stated that cryptocurrencies have been subject to extreme price volatility and valuation uncertainty and that cryptocurrencies are a security risk that includes significant risks of theft and fraud.

However, Kent Mason, a partner in the Davis & Harman LLP law firm who advises clients in retirement savings, says the Biden-era rule lacked a legal basis.

“Frankly, the 2022 guidance was wrong in almost every respect,” he says. “It showed no understanding of the law regarding brokerage windows, and it showed no understanding of the basic ERISA rules of prudence under which every investment is evaluated based on its own facts and circumstance.”

While the 2022 rule did not have the force of law, Bryan Courchesne, the CEO of DAIM [Digital Asset Investment Management] Crypto Wealth Management, who has managed bitcoin investing in 401(k)s for companies since August 2021, says his company underwent a DOL examination that lasted nearly two years. The review concluded in 2024 with no further recommendations or guidance regarding DAIM offerings.

Despite the favorable conclusion, Courchesne says, “The process was time-consuming and stressful for all involved, and we understand why many plan sponsors chose not to offer bitcoin in their plans.”

About one month after the DOL’s 2022 guidance, Fidelity Investments announced that it intended to offer bitcoin in its 401(k) plans, a move swiftly rebuked by the DOL. In July 2022, three Democratic senators sent an open letter to Fidelity questioning their decision to expose their participants to an “untested volatile asset.”

Trump and Republicans have been quicker to embrace—and, in some instances, to profit from—cryptocurrencies than some of their Democratic counterparts.

On Wednesday, Vice President J.D. Vance is set to speak at a bitcoin conference in Las Vegas, and on Tuesday, Trump Media and Technology Group, owned by Trump, announced plans to raise $2.5 billion to buy bitcoin and build up a reserve of the cryptocurrency.

“We view Bitcoin as an apex instrument of financial freedom, and now Trump Media will hold cryptocurrency as a crucial part of our assets,” said Devin Nunes, Trump Media’s CEO, in a statement.

Republicans have also supported legislatively the possibility of cryptocurrency investments in 401(k) plans. Senator Tommy Tuberville, R-Alabama, introduced a bill in May 2022 that would prohibit the secretary of labor from limiting the type of investments that could be offered to plan participants, including cryptocurrencies.

The “Financial Freedom Act,” reintroduced by Tuberville in April 2025, does not directly mention cryptocurrencies, but argues that ERISA does not prohibit fiduciaries from any specific investment alternative, as long as they provide a broad range of investment alternatives.

“The Biden administration was hellbent on controlling every aspect of Americans’ lives,” Tuberville said in a statement in April. “Meddling in 401(k) investments through overregulation restrains financial growth and restricts personal liberty. The federal government, which is $36 trillion in debt, shouldn’t be telling anyone how to invest their money. My bill ensures that hardworking Americans have the financial freedom to make decisions about how to invest their retirement savings.”