In brief
- Under the Biden administration, the Department of Labor discouraged workplace 401(k) digital asset investing.
- With Trump now in office, the Department has rescinded that guidance, calling it a Biden-era "overreach."
- The Department said it would adopt a "neutral stance" toward this type of investing.
The U.S. Department of Labor on Wednesday rescinded 2022 guidance that discouraged workplace 401(k) digital asset investing—the Trump administration's latest crypto-friendly move.
The agency said that it would cut the guidance to reaffirm "its neutral stance, neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate."
In 2022, under former President Joe Biden, the Labor Department issued guidance against incorporating crypto in 401(k) plans, citing fraud, theft and lack of regulation for the asset class. But the current administration has been fulfilling campaign promises to treat the digital asset industry more kindly and ratchet back regulation.
"The Biden administration’s department of labor made a choice to put their thumb on the scale," said U.S. Secretary of Labor Lori Chavez-DeRemer in a Wednesday statement. "We're rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats."
Trump-appointed regulators have scrapped a number of lawsuits against crypto-focused companies, including exchanges Coinbase and Kraken. The SEC also launched a crypto task force soon after Trump took office. SEC Commissioner Hester Peirce, a noted crypto advocate who has earned the affectionate nickname "Crypto Mom," is leading the task force, aiming to strike a more collaborative tone with crypto firms.
Lawmakers Urge Fidelity to Drop Bitcoin Retirement Plan After FTX Crash
U.S. Senators today sent another letter to investment giant Fidelity Investments, warning it against offering Bitcoin to its customers following the collapse of crypto exchange FTX. Senators Elizabeth Warren of Massachusetts, Tina Smith of Minnesota and Richard Durbin of Illinois all signed the letter asking Fidelity to scrap its 401(k) Bitcoin plan. Boston-based Fidelity, one of the world’s largest asset managers, is America’s largest provider of 401(k) savings accounts. In April, the firm lau...
The 2022 Labor Department guidance had threatened to investigate firms offering to include crypto in retirement accounts.
Companies offering crypto in retirement plans isn't common, but top asset manager Fidelity in 2022 debuted a new product offering companies and their participating employees access to Bitcoin.
Under the Biden administration, regulators and lawmakers scrutinized the industry, especially following the collapse of crypto exchange FTX and its subsidiaries—one of the biggest bankruptcies in history.
Edited by James Rubin
