Cryptocurrencies As Investment Options In 401(k) Plans

On March 10, 2022, the U.S. Department of Labor ("DOL") issued a Compliance Assistance Release¹ (the "Release") addressing its views on the availability of cryptocurrencies on 401(k) investment platforms. This guidance comes as more 401(k) plan service providers have announced their intention to make digital currencies available on their platforms. While the DOL has not taken a definitive position, it has expressed concern with cryptocurrencies being made available to 401(k) plan participants. The DOL urges plan fiduciaries to proceed with "extreme care before they consider adding a cryptocurrency option to a 401(k) plan's investment menu ...".²

In the Release, the DOL cautions that a plan fiduciary's decision to make cryptocurrencies available to its participants will be subject to ERISA's duties of prudence and loyalty. These duties include ensuring that investment options made available to participants are prudent. Citing the Supreme Court's decision in Hughes