The Department of Labor’s Employee Benefits Security Administration (EBSA) released Compliance Assistance Release No. 2025-01. For those of us keeping track at home, this new guidance effectively rescinds the now infamous 2022 Release that sent plan sponsors and ERISA attorneys into a quiet panic about the viability of cryptocurrencies in 401(k) plans.
Let’s rewind: the 2022 Release, issued under the Biden Administration, warned plan sponsors to exercise “extreme care”when it came to offering crypto investments in their retirement plans. “Extreme care,” while not a defined legal standard under ERISA, had the kind of chilling effect you might expect from a phrase better suited for a high-altitude mountain expedition than for investment lineups. While the 2022 Release didn’t carry the force of law, it carried the unmistakable weight of regulatory intimidation.
The new release changes that tone. It doesn’t endorse crypto. It doesn’t oppose it either. Instead, the DOL is stepping back into a more traditional, neutral stance—one rooted in ERISA’s actual fiduciary framework. That framework, in case we’ve forgotten, requires plan fiduciaries to act solely in the interest of plan participants, with the “care, skill, prudence, and diligence” of a prudent person familiar with such matters.
No more “extreme care.” Just regular, good-old-fashioned prudence.
The DOL now clarifies that the 2022 Release overstated its hand. Today’s release recognizes that ERISA does not single out asset classes for preemptive warning labels, and that it’s not the DOL’s role to referee which investments are inherently worthy or not. That’s the job of the fiduciaries—plan sponsors and committees—who are expected to do their homework and make prudent decisions based on facts, risk assessments, and participant needs.
So what does this mean?
If you’re a plan sponsor who had considered offering cryptocurrency investments—either directly in a core menu or indirectly through a brokerage window—but held back out of fear of regulatory scrutiny, the temperature just dropped a few degrees. You’re not being handed a green light. But the red light has been lifted.
Of course, just because you can offer crypto doesn’t mean you should. Cryptocurrency remains volatile, complex, and poorly understood by many plan participants. Fiduciaries still have a duty to evaluate whether any particular investment option, crypto included, aligns with the goals of the plan and the needs of its participants. That includes due diligence, risk assessment, and participant education—same as with any other investment.
As always, plan sponsors must walk the fine line between innovation and caution. The difference now is that the DOL is no longer trying to push them off that line. Welcome back to fiduciary neutrality.
