US Labor Dept. Urged to Rescind Crypto Guidance as Pushback Grows
The US Department of Labor continues to receive pushback on guidance issued in March restricting crypto for use in 401(k) retirement plans
Department of Labor | Source: Shutterstock
key takeaways
- The US President’s executive order calls for a unified approach to crypto regulation and innovation
- The Crypto Council for Innovation said Wednesday the Department of Labor’s guidance, issued in May, takes a one sided-approach to the nascent asset class
A crypto industry body in the US is urging the Department of Labor (DOL) to reconsider its crypto guidance for retirement plans, amid mounting pushback from concerned community members.
The Crypto Council for Innovation (CCI) said Wednesday the DOL’s guidance is inconsistent with directives from the White House and President Biden’s Executive Order for the nascent asset class.
In a letter penned to the department’s Acting Assistant Secretary Ali Khawar, CCI is asking DOL to rescind its Release No. 2022-01 guidance, issued in March, that precludes 401(k) administrators from including crypto investment options in their plans.
Regulators are now weighing up whether to issue an official rule that would address the appropriateness of crypto in 401(k) plans, Bloomberg reported Wednesday.
DOL’s guidance imposes a higher standard of care for crypto when compared to other financial options for 401(k)s by taking a one-sided and highly negative view, according to CCI.
The DOL is tasked with overseeing the security of the retirement, health and other workplace-related benefits of US employees.
It comes as the department stares down a legal challenge by 401(k) provider ForUsAll, which filed its lawsuit earlier this month claiming the department’s move to restrict the use of crypto in retirement plans is “arbitrary and capricious.”
A month after the DOL’s guidance was issued, Boston-based financial services provider Fidelity Investments moved to allow individuals to allocate a portion of their retirement savings to bitcoin through the company’s 401(k) investment lineup.
“CCI is deeply concerned…based on a factually and legally flawed analysis,” the council said in its letter. “We also urge the Department to commence a more open, inclusive and deliberative process to develop guidance for the inclusion of crypto assets on 401(k) investment menus.”
President Biden’s “Executive Order on Ensuring Responsible Development of Digital Assets” signed in March of this year, calls for a unified approach to regulating and evaluating cryptocurrencies.
It marked the first time the executive branch signed such an order for the industry and was welcomed by investors and businesses alike, though it fell short of providing clearer regulatory guidelines many were asking for.
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