Casey Wagner

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President Trump yesterday got the ball rolling on allowing alternative assets in 401(k)s and other employee retirement plans.&nbsp;



The <a href="https://www.whitehouse.gov/presidential-actions/2025/08/democratizing-access-to-alternative-assets-for-401k-investors/">executive order</a>, signed Thursday afternoon, directs the Labor Department to “reexamine” its guidance on fiduciary responsibilities around alternative assets. This includes real estate, private equity and cryptocurrencies.&nbsp;



The Labor Department is also tasked with working with the SEC and other federal agencies to evaluate regulations and determine which changes should be made.&nbsp;



“Burdensome lawsuits that seek to challenge reasonable decisions by loyal, regulated fiduciaries, and stifling Department of Labor guidance issued since my first term, however, have denied millions of Americans opportunities to benefit from investment in alternative assets,” Trump wrote in Thursday’s order.&nbsp;



“Such assets are an increasingly large portion of the portfolios of public pension and defined-benefit retirement plans and offer competitive returns along with diversification opportunities.”



Reports that Trump was due to sign the order started circling hours before he actually put pen to paper, so investors (crypto, mostly) began trading the news well in advance.



Bitcoin, as expected, rose on the news, gaining close to 3% Thursday before paring gains on Friday. As of 2 p.m. ET, BTC was trading 0.6% lower over 24 hours. ETH gained as much at 6% yesterday and was still in the green today, trading 3% higher over the day at 2 p.m. ET.&nbsp;



Hedge funds and PE firms were also excited about the executive order, which kickstarts a regulatory change many of them have been seeking for years.&nbsp;



The federal agencies have 180 days to complete their evaluations and give recommendations. Should new regulations be proposed, the process of writing, soliciting public comment and finalizing rules will likely take several months.&nbsp;



401(k) and other account providers will also have to get on board. Even if alternative assets get the official green light, brokerages aren’t required to offer it. We saw something similar with bitcoin ETFs, which are still unavailable for trading on some major platforms, <a href="https://blockworks.co/news/tradfi-crypto-vanguard-stands-apart-bitcoin">including Vanguard</a>.&nbsp;



And, even if providers do want to offer alternative assets, creating the infrastructure and clearing legal and compliance hurdles is going to be expensive and time-consuming.&nbsp;



Speaking of Vanguard, I will mention that the asset manager <a href="https://abcnews.go.com/Live/major-401k-trumps-new-crypto-private-equity-rules/story?id=124461859">told ABC news</a> yesterday that some alternative investments offer diversification and high return potential for investors, but education is crucial.&nbsp;



In a <a href="https://www.whitehouse.gov/presidential-actions/2025/08/guaranteeing-fair-banking-for-all-americans/">separate executive order</a> on Thursday, Trump took aim at banks, directing federal regulators to crack down on institutions that “discriminate against customers and businesses” based on political beliefs.&nbsp;



The practice, known as “debanking,” has become a <a href="https://mail.blockworks.com/p/debanking-debunked">hot topic</a> recently, especially in the crypto industry as <a href="https://blockworks.co/news/solana-teams-analyze-debanking-narrative">companies report</a> being denied access to baking services due to a perceived “unsavory” reputation.&nbsp;



The order requires Treasury Secretary Scott Bessent to “develop a comprehensive strategy” for combating politicized and unlawful debanking activities. Federal banking regulators are also asked to review any past or current banking activities that may have violated these principles.&nbsp;



All in all, it was a big day for federal financial regulation. Although like I said, don’t expect changes to happen too quickly. We’ll be watching.



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401(k)

Crypto investors hopeful amid new regulatory orders

Ben Strack

Republican Sen. Tommy Tuberville has re-introduced legislation that would prohibit the Department of Labor from limiting the type of investments that self-directed 401(k) account investors can choose, including crypto. 



“Every American should have the right to invest their retirement money how they see fit,” Tuberville, a senator from Alabama, told CNBC Wednesday.



Anthony Scaramucci, founder of investment firm SkyBridge Capital, took to Twitter to show his support for Tuberville’s proposal.&nbsp;



“Have to make this about the future and elect politicians that want to keep the US the mantle of financial services leadership,” Scaramucci tweeted.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Senator <a href="https://twitter.com/TTuberville?ref_src=twsrc%5Etfw">@TTuberville</a> gets crypto. We will support him. Have to make this about the future and elect politicians that want to keep the US the mantle of financial services leadership.&mdash; Anthony Scaramucci (@Scaramucci) <a href="https://twitter.com/Scaramucci/status/1625838097547071489?ref_src=twsrc%5Etfw">February 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The Department of Labor (DOL) said in <a href="https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/compliance-assistance-releases/2022-01" target="_blank" rel="noreferrer noopener">March 2022 guidelines</a> that the Employee Benefits Security Administration (EBSA) expects to investigate 401(k) plans that offer participant investments in cryptocurrencies and related products.



Tuberville, in response, <a href="https://www.tuberville.senate.gov/newsroom/press-releases/new-tuberville-legislation-promotes-financial-freedom-for-401k-investors/" target="_blank" rel="noreferrer noopener">introduced</a> the Financial Freedom Act last May, calling the guidance at the time “government overreach at its finest.” 



“We’ve got very good support; it just never made it to the floor last year,” Tuberville told CNBC Wednesday. “I think this year we’ve got a good chance…but at the end of the day it’s the right thing.” 



Rep. Byron Donalds, R-Fla., plans to make the proposal in the House on Friday, Politico first <a href="https://subscriber.politicopro.com/article/00000186-5136-de35-afde-71f6e2dc0001" target="_blank" rel="noreferrer noopener">reported</a>. 



Donalds said the Labor Department’s previous guidance is an “unprecedented maneuver” that infringes on economic liberty and free markets.&nbsp;



“To stand up against this gross example of government overreach, I am proud to support Senator Tuberville’s effort in the Senate to protect American investors from unelected Washington bureaucrats,&#8221; he told Blockworks in an email.



The DOL’s March 2022 <a href="https://blockworks.co/news/castle-funds-insurance-crypto">guidelines “chilled interest” by plan sponsors and fiduciaries</a> in direct crypto investments for the time being, Castle Funds Director Dan Hoover told Blockworks earlier this month.



Still, <a href="https://blockworks.co/news/fidelity-delves-deeper-into-crypto-by-allowing-bitcoin-in-401ks">Fidelity said last April</a> that the financial services company would give employers the option to offer bitcoin exposure to employees in their core 401(k) investment lineup. A spokesperson has told Blockworks the company views its Digital Assets Account offering as “a responsible solution to meet the demands of mainstream interest.”



Senators, including Elizabeth Warren, D-Mass., have repeatedly urged Fidelity — <a href="https://blockworks.co/news/senators-fidelity-stop-offering-bitcoin-401ks">as recently as November</a> — to stop its 401(k) sponsor partners from offering bitcoin exposure.



Sen. Tina Smith, D-Minn., said <a href="https://blockworks.co/news/senate-banking-hearing-on-crypto-crash">during a meeting of the Senate Housing and Urban Affairs Committee</a> Tuesday that she believes people should be “pretty much free” to invest their money how they want to, including in crypto.&nbsp;



“But I am really concerned about the potential for these highly volatile assets, and risky assets, to get into our financial system and what impact that might have…for future crypto collapses,” she added.



Fidelity has said it engages in “ongoing dialogue with regulators and policymakers” to ensure consumer protections and educational guidance for plan sponsors.



A Fidelity representative declined to comment on Tuberville’s proposed legislation.&nbsp;&nbsp;The re-introduced law also comes about a week after the SEC and the Financial Industry Regulatory Authority (FINRA) <a href="https://blockworks.co/news/regulators-warn-of-retirement-crypto-risk">again cautioned investors</a> allocating to alternative assets in self-directed individual retirement accounts (IRAs), highlighting crypto as a risk.



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Republican Initiative Would Counter Labor Department Crypto 401(k) Caution

Sebastian Sinclair

Three US Senators have urged Fidelity to stop its 401(k) sponsor partners from offering bitcoin exposure — likening crypto investing to “catching lightning in a bottle.”



In a Monday <a href="https://www.durbin.senate.gov/imo/media/doc/letter_to_fidelity_investments_ceo.pdf" target="_blank" rel="noreferrer noopener">letter penned</a> to Fidelity CEO Abigail Johnson, Democrat Senators Elizabeth Warren, Dick Durbin and Tina Smith argue that crypto markets have become riskier following <a href="https://blockworks.co/news/ftx-bankrupt-hacked-investigated-a-timeline-of-events" target="_blank" rel="noreferrer noopener">FTX’s sudden collapse</a>, making bitcoin unsuitable for retirement plans.



The Senators described the crypto industry as “full of charismatic wunderkinds, opportunistic fraudsters and self-proclaimed investment advisors promoting financial products with little to no transparency.”



“As a result, the ill-advised, deceptive, and potentially illegal actions of a few have a direct impact on the valuation of bitcoin and other digital assets,” they said.&nbsp;Durbin <a href="https://blockworks.co/news/us-politicians-donate-bankman-fried-cash-to-charity" target="_blank" rel="noreferrer noopener">received</a> $2,900 in campaign contributions from disgraced FTX CEO Sam Bankman-Fried, money he reportedly says will be donated to charity.



The letter follows similar pleas in <a href="https://www.warren.senate.gov/newsroom/press-releases/warren-questions-fidelity-on-plans-to-allow-bitcoin-investments-for-401k-plans" target="_blank" rel="noreferrer noopener">May</a> and <a href="https://www.durbin.senate.gov/imo/media/doc/durbin_bitcoin_72622.pdf" target="_blank" rel="noreferrer noopener">July</a>. Senators Warren and Smith have previously cited the cryptocurrency sector’s murky valuations as reason for caution, labeling investing in digital assets a “speculative gamble.”



Boston-based Fidelity began allowing employees to put as much as 20% of their retirement savings into bitcoin exposure this fall.



The crypto industry considered the move a strong sign of shifting institutional sentiment toward the 12 year old asset class, although bitcoin has shed some 60% of its value since Fidelity flagged the 401(k) move in late April.



Fidelity, which overall <a href="https://fidelityinvestments2020news.q4web.com/press-releases/news-details/2022/Fidelity-Q3-2022-Retirement-Analysis-Despite-Continued-Volatility-Retirement-Fundamentals-Remain-Sound/default.aspx" target="_blank" rel="noreferrer noopener">boasts</a> some $9.6 trillion in assets under administration, is the largest individual retirement plan (IRA) provider in the US — supporting more than 35 million IRA, 401(k) and 403(b) retirement accounts. As of 2020, FIdelity <a href="https://www.nytimes.com/2022/04/26/business/crypto-401k-fidelity.html" target="_blank" rel="noreferrer noopener">controlled</a> more than a third of the retirement fund market in the US, maintaining $2.4 trillion in 401(k) assets.



“Any investment strategy based on catching lightning in a bottle, or motivated by the fear of missing out, is doomed to fail,” the Senators said. 



“By many measures, we are already in a retirement security crisis, and it should not be made worse by exposing retirement savings to unnecessary risk.”



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Senators Once Again Ask Fidelity to Stop Offering Bitcoin in 401(k)s

<div id="highlights-block_62aa8aecc7572" class="highlights">
 <ul>
 <li>The US President&#8217;s executive order calls for a unified approach to crypto regulation and innovation</li>
 <li>The Crypto Council for Innovation said Wednesday the Department of Labor&#8217;s guidance, issued in May, takes a one sided-approach to the nascent asset class</li>
 </ul>
 
</div>



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&#8217;s guidance is inconsistent with directives from the White House and President Biden’s Executive Order for the nascent asset class.



In a <a href="https://cryptoforinnovation.org/wp-content/uploads/2022/06/Crypto-Council-for-Innovation-Department-of-Labor-Response-Letter_Final.pdf" target="_blank" rel="noreferrer noopener">letter</a> penned to the department&#8217;s Acting Assistant Secretary Ali Khawar, CCI is asking DOL to rescind its Release <a href="https://www.dol.gov/newsroom/releases/ebsa/ebsa20220310" target="_blank" rel="noreferrer noopener">No. 2022-01 guidance</a>, 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, <a href="https://news.bloomberglaw.com/daily-labor-report/401k-crypto-investment-restrictions-eyed-by-labor-regulators" target="_blank" rel="noreferrer noopener">Bloomberg reported</a> Wednesday.



DOL&#8217;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 <a href="https://cms.blockworks.co/labor-dept-crypto-guidance-is-arbitrary-and-capricious-forusall-lawsuit-alleges/" target="_blank" rel="noreferrer noopener">ForUsAll</a>, which filed its lawsuit earlier this month claiming the department&#8217;s move to restrict the use of crypto in retirement plans is “arbitrary and capricious.”



A month after the DOL&#8217;s guidance was issued, Boston-based financial services provider <a href="https://cms.blockworks.co/fidelity-delves-deeper-into-crypto-by-allowing-bitcoin-in-401ks/" target="_blank" rel="noreferrer noopener">Fidelity Investments</a> moved to allow individuals to allocate a portion of their retirement savings to bitcoin through the company’s 401(k) investment lineup.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;CCI is deeply concerned&#8230;based on a factually and legally flawed analysis,&#8221; the council said in its letter. &#8220;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.&#8221;</blockquote>



President Biden’s &#8220;<a href="https://cms.blockworks.co/biden-signs-crypto-executive-order-promoting-responsible-innovation/" target="_blank" rel="noreferrer noopener">Executive Order</a> on Ensuring Responsible Development of Digital Assets&#8221; 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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US Labor Dept. Urged to Rescind Crypto Guidance as Pushback Grows

<div id="highlights-block_6298e85f51b02" class="highlights">
 <ul>
 <li>The Department of Labor in March published compliance assistance for 401(k) plans considering crypto investments</li>
 <li>Fidelity revealed in April that it would permit individuals to allocate a portion of their retirement savings to bitcoin</li>
 </ul>
 
</div>



401(k) provider ForUsAll filed a lawsuit against the US Department of Labor in federal court Thursday, claiming that the agency’s attempt to restrict the use of cryptocurrency in retirement plans is “arbitrary and capricious.”



The suit seeks to prevent the government agency from restricting the types of investments Americans can make within a self-directed brokerage account (SDBA), according to <a href="https://resources.forusall.com/Dkt.%20001%20ForUsAll%20Complaint.pdf" target="_blank" rel="noreferrer noopener">the complaint</a>.



The lawsuit comes after the Department of Labor (DOL) in March <a href="https://www.dol.gov/newsroom/releases/ebsa/ebsa20220310" target="_blank" rel="noreferrer noopener">published compliance assistance</a> for 401(k) plans considering crypto investments and threatened to investigate those that offer such options.



“At this stage of cryptocurrency’s development, fiduciaries must exercise extreme care before including direct investment options in cryptocurrency,” Employee Benefits Security Administration’s Acting Assistant Secretary Ali Khawar said in a statement at the time.



ForUsAll CEO Jeff Schulte noted in a statement that SDBAs have for decades allowed 401(k) holders the ability to invest in a broader range of investments than what is offered by their employers’ fund lineup.&nbsp;



“But now the DOL is trying to change the rules overnight, attempting to restrict the types of investments individuals can choose to make, despite having no legal authority to do so — all because they don’t like a single asset class,” he said. “We won’t stand by while they restrict everyday Americans’ ability to make the most of their hard-earned money.”



A ForUsAll spokesperson told Blockworks the company is hoping for a quick decision, given the concerns expressed in an <a href="https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fforusall.mxcypress.com%2F6075b737c4fa7570848205fc%2Fl%2FfHNg7R3S3QUOOfLH9%3FmessageId%3DjudtWMga6xFX7V4uN%26rn%3DgIsxWQzVlcvZkI%26re%3DISbvNmLhlGZl1WawJGQsxWYzVncvZmI%26sc%3Dfalse&amp;data=05%7C01%7CSArpin%40bpimedia.com%7Ca325672838a046024e7b08da44b5948a%7Cab457ec51e6c4dd99f08ea5b5fdcfeb5%7C1%7C0%7C637897843921018641%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=%2FxnLSWvruWhmswlYuIPsnsAS3pg3r48kUIVLLiaV9tA%3D&amp;reserved=0" target="_blank" rel="noreferrer noopener">open letter</a> from players in the traditional 401(k) industry to Khawar. 



ForUsAll <a href="https://cms.blockworks.co/retirement-investment-provider-introduces-alt-401k/" target="_blank" rel="noreferrer noopener">began allowing</a> employers to provide alternative investment options within 401(k) plans last year. The company noted that it would be using Coinbase Institutional for the custody and exchange of digital assets. 



Financial services giant Fidelity Investments <a href="https://cms.blockworks.co/fidelity-delves-deeper-into-crypto-by-allowing-bitcoin-in-401ks/" target="_blank" rel="noreferrer noopener">announced</a> in April that it would permit individuals to allocate a portion of their retirement savings to bitcoin through its 401(k) platform.



Schulte told Blockworks at the time that crypto access in 401(k) plans is inevitable, adding that he expected <a href="https://cms.blockworks.co/will-competitors-follow-fidelitys-lead-in-401k-bitcoin-offering/" target="_blank" rel="noreferrer noopener">other large institutions to follow</a> Fidelity’s lead over time. 



Fidelity’s announcement was met with opposition from Sens. Elizabeth Warren, D-Mass., and Tina Smith, D-Minn., who wrote a letter to Fidelity CEO Abigail Johnson last month, calling crypto investments “a risky and speculative gamble.”



Fidelity privately responded to the senators to address some of their concerns, a spokesperson told Blockworks.&nbsp;



“The [Digital Asset Account] offering features several institutional consumer safeguards including but not limited to, excessive trading oversight, investing limits, transparency, market-leading education, and cyber-security features,” the representative said. “Fidelity looks forward to continuing the dialogue on this exciting offering with federal regulators and policymakers consistent with our approach to many new services we offer our customers.”



Moe Vela, a former advisor to then-Vice President Joe Biden, said he believes many cryptoassets, including bitcoin, are not optimal for retirement plans because of their inherent volatility, vulnerability and lack of predictability.&nbsp;&nbsp;



“I believe it would be prudent to mitigate risks at all times by seeking to invest in cryptocurrencies that are backed by real assets and transparent in their infrastructure and operations,” he told Blockworks.&nbsp;&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“At the same time, I respect the right of workers, retirees and pension fund managers to choose how they invest their funds.”</blockquote>



Sen. Tommy Tuberville, R.-Ala., last month <a href="https://www.tuberville.senate.gov/newsroom/press-releases/new-tuberville-legislation-promotes-financial-freedom-for-401k-investors/" target="_blank" rel="noreferrer noopener">introduced the Financial Freedom Act</a>, which would prohibit the DOL from limiting the type of investments that self-directed 401(k) account investors can choose through a brokerage window.



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