Department of Labor Revises its Guidance on Cryptocurrencies:

As discussed in the April 2022 edition of The Speed Reader, in March of 2022 the Department of Labor (the “DOL”) published its first guidance on including cryptocurrencies in a 401(k) plan’s investment lineup. That guidance directed plan fiduciaries to exercise “extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.”

On May 28, 2025, the DOL published Compliance Assistance Release No. 2025-01 (the “Release”). The Release mainly provides as follows:

• The March 2022 guidance’s standard of “extreme care” is not found in ERISA, and that standard “differs from ordinary fiduciary principles thereunder.”
• The Release “memorializes the [DOL’s] decision to rescind the [March 2022] guidance in full.”
• The Release “restores the [DOL’s pre-March 2022] historical approach by neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate. When evaluating any particular investment type, a plan fiduciary’s decision should consider all relevant facts and circumstances and will “necessarily be context specific.” 

A footnote in the Release states that although it specifically addresses “cryptocurrencies,” the DOL also intends the Release to apply to a wide range of “digital assets” (e.g., “tokens,” “coins,” “crypto assets,” and any derivatives of those). The Release also reminds us that a fiduciary’s decision regarding whether to add or retain any investment in a plan’s investment lineup is governed by the following ERISA rule:

• Fiduciaries must act “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims” for the “exclusive purpose” of maximizing risk-factored financial returns to a plan’s participants and beneficiaries.