Trump's Administration Reverses Previous Guidance Prohibiting Cryptocurrency in Retirement Investments under Department of Labor
The U.S. Department of Labor has withdrawn a guidance issued in 2022 that discouraged 401(k) plans from investing in digital assets, marking a significant shift in the crypto-sphere under the current Trump administration.
The withdrawal, announced on May 28, 2025, signifies a reaffirmation of the Department's neutral stance, emphasizing that it will not endorse or disapprove of plan fiduciaries who include cryptocurrency in their investment portfolios.
This U-turn represents a return to the Department's traditional approach, having previously cautioned against the incorporation of cryptocurrencies in employee retirement plans under the Biden administration. The 2022 guidance had advised plan fiduciaries to exercise extreme caution due to the inherent risks associated with crypto assets, such as price volatility and fraud.
In rescinding the guidance, U.S. Secretary of Labor Lori Chavez-DeRemer stated that the Biden administration's department had unnecessarily weighed in on investment decisions, instead advocating for fiduciaries to make their own informed decisions. The Trump administration's approach to the digital asset industry is seen as a departure from the more stringent regulation prevailing during the Biden era.
Since Trump took office, government agencies have been more accommodating towards the crypto industry, ensnaring a series of lawsuits against crypto-focused companies. Notably, the Security and Exchange Commission (SEC) launched a crypto task force and appointed SEC Commissioner Hester Peirce as its head, with the intent of fostering a more collaborative relationship with crypto firms.
The withdrawal of the guidance removes the threat of potential investigations against companies offering crypto in retirement accounts. While not widely prevalent, prominent asset manager Fidelity ventured into offering employees access to Bitcoin in 2022. However, whether more employers will follow suit remains to be seen, given the lack of a safe harbor that would protect fiduciaries from liability for offering such investments.
The change in regulatory stance comes amid a tumultuous period for the crypto industry, including the recent collapse of FTX and its subsidiaries, one of the largest bankruptcies in history, which garnered significant scrutiny from regulators and lawmakers.
Edited by James Rubin
- The U.S. Department of Labor's withdrawal of the 2022 guidance marks a significant shift in the crypto-sphere, allowing 401(k) plans to invest in digital assets like bitcoin (BTC) and Ethereum (ETH) under the current Trump administration.
- The reaffirmation of the Department's neutral stance on cryptocurrencies signifies a return to its traditional approach, emphasizing that it will not endorse or disapprove of plan fiduciaries who include crypto assets in their investment portfolios.
- The withdrawn guidance, previously issued under the Biden administration, had advised plan fiduciaries to exercise extreme caution due to the inherent risks associated with crypto assets, such as price volatility and fraud.
- The Trump administration's approach to the digital asset industry is seen as a departure from the more stringent regulation prevalent during the Biden era, making way for a more accommodating stance towards cryptocurrency investing in personal finance.
- Government agencies, such as the Security and Exchange Commission (SEC), have been more receptive towards the crypto industry under the Trump administration, resulting in the creation of a crypto task force aimed at fostering a collaborative relationship with crypto companies.
- The withdrawal of the guidance removes the threat of potential investigations against companies offering cryptocurrency in retirement accounts, potentially opening the door for more employers to invest in crypto, following the lead of prominent asset manager Fidelity, which offered employees access to Bitcoin in 2022.
- The change in regulatory stance comes at a time when the crypto industry is facing a period of tumult, including the recent collapse of FTX and its subsidiaries, with regulators and lawmakers intensifying their scrutiny due to the widespread impact of the event on the general-news landscape and technology sector.
