In a major policy reversal, the Department of Labor under the Trump administration has rescinded Biden-era guidance that discouraged the inclusion of cryptocurrencies in workplace retirement plans. The move signals a more laissez-faire approach to digital assets within 401(k) offerings, leaving the decision to include crypto investments squarely in the hands of plan fiduciaries.
Regulatory U-Turn on Crypto in Retirement Plans
Back in 2022, Biden administration regulators sounded a stark warning about digital assets in retirement accounts. Citing the volatile and speculative nature of cryptocurrencies, the Department of Labor urged fiduciaries to exercise “extreme care” before making crypto options available to retirement savers. The department emphasized the unique risks tied to digital assets, including fraud, theft, and difficulty in valuation.
Now, that guidance has been formally rolled back. On May 28, the Labor Department announced it would take a neutral position on cryptocurrencies, allowing fiduciaries to assess crypto offerings without federal interference.
"The Biden administration’s Department of Labor made a choice to put their thumb on the scale. We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats." — Lori Chavez-DeRemer, Secretary of Labor
Caution Still Reigns Among Plan Administrators
Despite the policy shift, retirement industry experts believe plan administrators will remain wary. The inclusion of crypto in retirement offerings has so far been minimal, and the threat of litigation still looms large. With over 715,000 401(k) plans representing nearly $9 trillion in assets, fiduciaries are obligated to act in participants’ best interests — a responsibility not easily reconciled with the high-risk nature of digital currencies.
"Marketers have described crypto as a diversifier, currency hedge, inflation hedge and a safe haven. So far, it hasn’t lived up to those billings." — Bryan Armour, Morningstar
While crypto has at times offered windfalls for resilient investors, its correlation with equity market downturns has cast doubt on its role as a portfolio stabilizer.
The Rise of Accessible Crypto Vehicles
Even before the regulatory rollback, financial giants like Fidelity had begun paving a path for crypto in retirement accounts. In 2022, Fidelity introduced a digital asset account option allowing plan participants to allocate part of their savings to Bitcoin — provided their employer opted in.
Since then, access has broadened through the proliferation of exchange-traded funds (ETFs) tied to crypto. These vehicles function much like traditional stock investments and have gained significant traction. BlackRock and Fidelity are among the firms offering spot Bitcoin ETFs, which have collectively attracted $126 billion in assets since their January 2024 debut. These funds have returned 123% year-to-date, making them a powerful draw for investors despite crypto’s inherent volatility.
Legal and Fiduciary Risks Remain High
Ali Khawar, a former deputy assistant secretary at the Department of Labor who helped shape the original Biden-era guidance, warned that the new stance removes helpful guardrails for plan sponsors. Fiduciaries are still legally bound to act prudently, and a lack of rigorous due diligence on volatile assets like crypto could open the door to lawsuits.
"If they don’t do their due diligence correctly, when this volatile asset class takes its next dip, they’re going to be exposed to lawsuits from savers who rightly wonder whether they should have been given this option in the first place." — Ali Khawar, Former Deputy Assistant Secretary, U.S. Department of Labor
The Biden-era guidance had stopped short of an outright ban but served as a strong deterrent. Now, plan sponsors must evaluate digital assets independently — a tall order given the asset class’s complexity and rapidly evolving regulatory landscape.
A Booming Market Outside Retirement Plans
Outside of 401(k) environments, crypto investment has surged. ETFs tracking Ethereum and lesser-known coins have followed Bitcoin’s success, though with more muted inflows. As of November, the Government Accountability Office noted nearly 70 digital asset investment options were technically accessible to 401(k) participants through self-directed brokerage windows.
Approximately 26% of workplace plans offer such windows, primarily in large-scale plans. Investments made through these vehicles fall outside an employer’s fiduciary duty, offering participants wider access — and greater risk.
New filings for over 70 additional crypto ETFs, spanning coins like Solana and Dogecoin, are currently awaiting approval from the SEC. But not all financial professionals are convinced this avalanche of options will meet investor demand or fiduciary scrutiny.
"Unlike stocks or bonds, crypto isn’t backed by earnings, cash flow or expected future returns. Its value hinges entirely on supply and demand, which makes it especially vulnerable to hype cycles and sentiment shifts." — Dustin Suttle, Certified Financial Planner
Political Ties and Industry Enthusiasm
The Trump administration’s pivot comes alongside deeper political and financial entanglements with the crypto industry. Vice President JD Vance recently championed Bitcoin during the Bitcoin 2025 conference in Las Vegas, describing crypto as a safeguard against governmental mismanagement.
"Crypto is a hedge against bad policymaking from Washington, no matter what party’s in control." — JD Vance, Vice President of the United States
Meanwhile, President Trump and his family have expanded their involvement in the crypto sector, raising concerns over potential conflicts of interest as federal enforcement actions against crypto firms are quietly dropped.
Fiduciary Principles Unchanged Despite Policy Shift
Ultimately, the rollback of federal guidance does not lower the legal bar for retirement plan fiduciaries. Experts stress that procedural openness should not be confused with regulatory endorsement.
"This D.O.L. shift may open the door procedurally — it shouldn’t be perceived as lowering the bar. Most prudent fiduciaries I know are still keeping that door closed." — Emily Jaffe, President, OFC Wealth Management
As digital assets continue to evolve and attract both retail and institutional interest, the burden of navigating crypto’s promise and peril in retirement plans now rests more heavily than ever on plan sponsors themselves.
