CryptoNews: The DOL Just Opened the Door for Crypto in Your 401(k)

The Department of Labor just rescinded its 2022 guidance that effectively discouraged 401(k) plans from offering cryptocurrency investments.

I have gotten out of the habit of posting shorter-form updates when they are hot off the presses, instead waiting and publishing longer-form pieces less frequently. There has been some feedback from readers that you like these updates, so I will make an effort of not overthinking things and just putting the news out there when I see it for anyone who is not tethered to news outlets and/or Twitter.

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In a brief but impactful release (Compliance Assistance Release No. 2025-01), the Department of Labor (DOL) walked back its previous stance that required plan fiduciaries to exercise "extreme care" before adding crypto to 401(k) menus. That language—"extreme care"—created a chilling effect that kept most employers from even considering digital assets as an option for retirement savers.

The DOL now acknowledges what many in the industry have been saying: "extreme care" isn't actually a standard found anywhere in ERISA, the federal law governing retirement plans. Instead, they're returning to a neutral approach that treats crypto like any other potential investment option.

What This Means

For plan sponsors and fiduciaries, this removes a major regulatory roadblock. You're no longer facing a heightened standard of scrutiny just because an investment involves Bitcoin, Ethereum, or other digital assets. The normal ERISA prudence standard applies—act with care, skill, and diligence, just like you would when evaluating any investment.

This doesn't mean crypto will flood into 401(k)s overnight. Fiduciaries still need to:

• Conduct thorough due diligence

• Consider volatility and risk profiles

• Evaluate how crypto fits within a diversified menu

• Monitor ongoing performance and suitability

But critically, they can now do this analysis without the DOL breathing down their necks with special skepticism reserved just for digital assets.

Why This Matters

The timing here is notable. With Bitcoin ETFs now mainstream, institutional adoption growing, and major financial services firms offering crypto custody, the DOL's 2022 position was looking increasingly out of step with market reality.

This change acknowledges that digital assets have matured as an asset class. While they remain volatile and speculative for many investors, that's a decision for fiduciaries to evaluate—not for regulators to pre-judge with special barriers.

The Bigger Picture

This is part of a broader shift we're seeing in how regulators approach crypto. Rather than blanket skepticism, there's growing recognition that digital assets are here to stay and need to be integrated into existing regulatory frameworks rather than cordoned off.

For the millions of Americans who get their primary investment exposure through their workplace 401(k), this could eventually mean access to an asset class that's been largely off-limits. Whether that's a good thing will depend on how thoughtfully plan sponsors approach these options.

The DOL is essentially saying: We trust fiduciaries to do their jobs. Evaluate crypto like you'd evaluate any investment. No special fear required.

What kind of lawyer would I be without a disclaimer?

Everything I post here constitutes my own thoughts, should only be used for informational purposes, and does not constitute legal advice or establish a client-attorney relationship (though I am happy to discuss if there is something I can help you with). I can be reached via email at dlopezkurtz@crokefairchild.com, on telegram @davidlopezkurtz, on twitter @lopezkurtz, and on LinkedIn here.