key takeaways
- A 401(k) provider is suing the Labor Department over its aggressive anti-crypto stance.
- The department said in March that it would investigate any company that allows cryptocurrency allocations to be part of their retirement plan.
- The news follows Fidelity Investments’ April announcement that it would allow its customers to allocate up to 20% of their 401(k) retirement accounts in bitcoin.
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ForUsAll, a 401(k) provider based in San Francisco, is suing the Labor Department over its recent decision to investigate companies offering customers the option of allocating a portion of their retirement plans in cryptocurrency.
“arbitrary, capricious, and otherwise not in accordance with the law”
A 401(k) provider has filed Complaint Against the US Department of Labor (DOL) for invalidating the department’s recent choice to investigate companies offering cryptocurrency allocations as part of their retirement plans. It called the decision “arbitrary, capricious, and otherwise not in accordance with the law”.
ForUsAll, a San Francisco-based company, markets itself as “the first 401(k) platform to provide access to cryptocurrency.” Its other services include client exposure to mutual and ESG funds for low fees. company announced Last year struck a deal with crypto exchange Coinbase that will allow ForUsAll customers to invest up to 5% of their 401(k) contributions in bitcoin, ethereum and other cryptocurrencies.
The company does not stand alone. Fidelity Investments, the fourth largest asset manager globally with over $4.2 trillion in assets under management, declared Last month it would allow investors to allocate up to 20% of their 401(k) retirement accounts in bitcoin. also recently decision made To expand its digital assets subsidiary to offer investors investments in Ethereum.
DoL has issued a warning to 401(k) providers about their crypto plans, stating release Cryptocurrencies were “speculative and volatile investments” this March that offered custody, recordkeeping, valuation and regulatory concerns. These considerations were sufficient for the DOL to “conduct an investigative program aimed at schemes offering participant investment in cryptocurrency” and to “take appropriate action to protect the interests of plan participants”.
we have all Having said To wall street journal that “about 150 of the 500 companies using its 401(k) services have signed agreements that include cryptocurrency options” although a third of customers have waited before offering the option since the DOL’s guidance was issued. have decided to do. ForUsAll’s clients average 160 employees and have $3 million in 401(k) assets.
Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.
