Employee Benefit Plan Review | Is the Crypto Winter Finally Starting to Thaw?

Cryptocurrency and other digital assets are among the most controversial investment products to emerge in recent years. With the potential for “outsized profits” it is no wonder that retirement plan participants want the ability to invest in cryptocurrency as part of their personal retirement strategy. However, the U.S. Department of Labor’s (DOL) recent guidance, Compliance Assistance Release No. 2022-01 (Crypto Guidance), makes the investment of retirement plan assets in cryptocurrency more complicated. The DOL’s Crypto Guidance warns 401(k) fiduciaries to “exercise extreme care” before allowing plan participants to invest plan assets in cryptocurrencies due to perceived “significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft, and loss.” Further, to protect the interests of 401(k) plan participants and beneficiaries, the DOL announced that it intends to investigate 401(k) plans that offer cryptocurrency as an investment option to protect plan participants from these risks.

Click here to read the full article written by Gary Blachman published in Employee Benefit Plan Review.