In recent months, the U.S. Department of Labor (“DOL”) has become aware of firms marketing investments in cryptocurrencies to 401(k) recent months plans as potential investment options for plan participants. In response to these concerns, the DOL issued Compliance Assistance Release 2022-01 (the “Release”).
The Release warns 401(k) plan fiduciaries to“exercise extreme care” before considering cryptocurrency investments. The Release also states that the DOL will investigate plan fiduciaries who make cryptocurrency available to plan participants, either as a core investment option or through a brokerage window. This threat has sent shutters through the benefits community as numerous brokerage windows permit such investments.
As a result of the Release, plan fiduciaries will need to work with their ERISA counsel to evaluate their brokerage windows.