Labor Department Lifts Crypto Warning for 401(k) Plans

The U.S. Department of Labor has rescinded its 2022 guidance that warned fiduciaries to exercise 'extreme care' before adding cryptocurrency investment options to 401(k) plans, returning to a neutral stance on digital assets. Labor Secretary Lori Chavez-DeRemer announced the rollback, clarifying that investment choices are the responsibility of fiduciaries, not federal officials. The original Biden-era guidance had highlighted risks like volatility and fraud, but critics argued it exceeded requirements under ERISA and broke from past principles-based policy. This policy shift coincides with the Trump administration's pro-crypto business ventures and aims to position the U.S. as a leader in digital assets. While the change removes a major regulatory barrier, many experts believe fiduciaries will continue to approach crypto options cautiously. The announcement comes amid growing political and business interest in cryptocurrency.