Directly on the heels of the Biden Administration’s digital asset Executive Order issued on March 9, 2022 (Executive Order), the U.S. Department of Labor (DOL) published its own guidance on the use of cryptocurrencies as a 401(k) plan investment in Compliance Assistance Release No. 2022-01 (CAR). The DOL guidance is not limited to crypto, but advises plan fiduciaries regarding all digital assets, including Ethereum, tokens, and other derivations thereof.
Ominous Warning – Duty of Prudence & Personal Liability at Stake
The DOL CAR is nothing short of an ominous warning for plan fiduciaries. Similar to the Executive Order, the DOL CAR highlights that there are many risks involved when offering cryptocurrencies or other digital assets as plan investment options. In light of these risks, the DOL CAR “cautions plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.”