In the movie Casino, Robert DeNiro as Sam Rothstein wanted to take on the Nevada Gaming Board after they denied his request for his license. Andy Stone, a Teamster controlled by the Mafia and played by Alan King told him it was a bad idea: “The old man said, ‘Maybe your friend should give in.’ And when the old man says ‘maybe’, that’s like a papal bull. Not only should you quit, you should run!”
I’m telling you that if you have a 401(k) plan, don’t allow crypto investing, just because the Department of Labor (DOL) is saying you should be cautious and are looking at plans that offer it.
The DOL has published compliance assistance for 401(k) plan fiduciaries that are considering plan investments in cryptocurrencies, and it sounds like a warning.
The department’s Employee Benefits Security Administration (EBSA), published Compliance Assistance Release No. 2022-01 cautioning plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.
The guidance states that the DOL has “serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptocurrencies” or other products whose value is tied to cryptocurrencies.
EBSA says it expects to conduct an investigative program aimed at plans that offer participant investments in cryptocurrencies and related products, and to take appropriate action to protect the interests of plan participants and beneficiaries with respect to these investments. What does this mean? Until crypto is regulated and DOL offers guidance that it’s OK, don’t do it.
