Financial regulations for cryptocurrency in 401(k) retirement plans have been loosened, giving more control to the plan's financial managers or fiduciaries.

The U.S. Department of Labor (DOL) has changed its stance on cryptocurrency investments in 401(k) plans. On May 28, 2025, the DOL issued Compliance Assistance Release No. 2025-01 that rescinded its 2022 guidance which had previously urged plan fiduciaries to exercise "extreme care" when considering cryptocurrency options due to risks such as fraud and volatility.

In 2022, the DOL argued that digital assets carried "significant risks and challenges" that could jeopardize long-term financial security. The agency warned plan fiduciaries against promoting crypto investments to retirement savers. Critics argued that the previous guidance clashed with the neutral, principles-based framework traditionally upheld under the Employee Retirement Income Security Act (ERISA).

However, the DOL has reverted to its historical neutral approach, meaning it neither endorses nor disapproves of cryptocurrencies in retirement plans but requires fiduciaries to prudently evaluate these investments based on the “facts and circumstances” specific to their plan and participants, similar to how other investments are assessed.

This shift was supported by an executive order signed by President Trump in August 2025 promoting “democratizing access” to alternative assets—including cryptocurrency, private equity, and real estate—within 401(k) plans and instructing the DOL, Treasury, and SEC to facilitate this expansion. The DOL’s new position acknowledges a wider universe of permissible investments under ERISA and focuses on fiduciaries' proper evaluation rather than imposing per se restrictions on asset classes like crypto.

In summary: - Previously (2022), DOL cautioned extreme care due to crypto risks. - Now (2025), DOL rescinded that guidance, restoring a fact-specific, fiduciary-evaluation standard. - An executive order encourages broadening alternatives in 401(k)s, including crypto.

This marks a notable federal guidance shift toward enabling cryptocurrency and other alternative assets as part of retirement investment portfolios under ERISA fiduciary principles. The DOL’s decision may put pressure on both regulators and retirement plan providers to strike a balance between innovation and investor protection, without prematurely closing the door on new investment opportunities.

[1] U.S. Department of Labor (2025). Compliance Assistance Release No. 2025-01. Retrieved from https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/compliance-assistance/compliance-assistance-release-2025-01 [2] U.S. Department of Labor (2022). Field Assistance Bulletin No. 2022-02. Retrieved from https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/field-assistance-bulletins/2022-02 [3] The White House (2025). Executive Order on Promoting Competition in the American Economy. Retrieved from https://www.whitehouse.gov/briefing-room/presidential-actions/2025/08/09/executive-order-on-promoting-competition-in-the-american-economy/ [4] U.S. Department of the Treasury (2025). Retirement Savings Modernisation: Frequently Asked Questions. Retrieved from https://www.treasury.gov/resource-center/faqs/Retirement-Savings-Modernisation-FAQs [5] U.S. Securities and Exchange Commission (2025). Proposed Rule: Regulation Best Interest. Retrieved from https://www.sec.gov/rules/proposed/2025/34-94051.htm

In the world of finance and investing, technology-driven assets like cryptocurrency are moving towards increased acceptance, as evidenced by the U.S. Department of Labor's (DOL) shift in stance on cryptocurrency investments in 401(k) plans, supported by an executive order focusing on democratizing access to alternative assets.
Security concerns regarding the volatility and risks associated with cryptocurrency were highlighted by the DOL in 2022, but with the issuance of Compliance Assistance Release No. 2025-01 in May 2025, the agency rescinded this earlier guidance, returning to a fact-specific, fiduciary-evaluation standard for cryptocurrency investments.
Acknowledging a wider universe of permissible investments under ERISA, the DOL's decision on cryptocurrency investments in retirement plans is poised to encourage regulators and retirement plan providers to balance innovation with investor protection, without excluding new opportunities like crypto, private equity, and real estate prematurely.

Financial regulations for cryptocurrency in 401(k) retirement plans have been loosened, giving more control to the plan's financial managers or fiduciaries.