In a significant policy reversal, the Trump administration has rescinded a 2022 Department of Labor (DOL) guidance that had urged fiduciaries to exercise “extreme care” when considering the inclusion of cryptocurrencies in 401(k) retirement plans. This move marks a shift towards a more neutral federal stance on digital assets within retirement portfolios, aligning with the administration’s broader pro-cryptocurrency agenda.
The original guidance, issued in March 2022 under the Biden administration, cautioned plan fiduciaries about the risks associated with cryptocurrencies, including volatility, fraud, and record-keeping challenges. It emphasized that fiduciaries should “exercise extreme care” before adding cryptocurrency options to investment menus, a standard not explicitly found in the Employee Retirement Income Security Act (ERISA). Critics argued that this language deviated from the DOL’s historically neutral approach to investment types and strategies.
On May 28, 2025, the DOL’s Employee Benefits Security Administration (EBSA) officially rescinded the 2022 guidance through Compliance Assistance Release No. 2025-01. The department stated that the previous guidance represented governmental overreach and reaffirmed its neutral stance, neither endorsing nor disapproving of fiduciaries who conclude that including cryptocurrency in a plan’s investment menu is appropriate.
U.S. Secretary of Labor Lori Chavez-DeRemer commented, “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.”
The rescission of the 2022 guidance potentially opens the door for more widespread inclusion of cryptocurrency options in 401(k) plans. However, experts caution that fiduciaries must still adhere to ERISA’s standards, ensuring that investment decisions are made with the care, skill, prudence, and diligence that a prudent person would use.
Financial advisors recommend that any exposure to cryptocurrencies within retirement portfolios should be limited, typically suggesting allocations of 1% to 3% due to the speculative nature of these assets. Additionally, while some large financial institutions like Fidelity Investments have already introduced cryptocurrency options in retirement plans, broader adoption may take time as plan sponsors navigate regulatory complexities and risk disclosures.
The rescission aligns with the Trump administration’s broader efforts to promote cryptocurrency adoption. President Trump has pledged to make the U.S. the “crypto capital of the world,” appointed a “crypto czar,” and signed an executive order recognizing Bitcoin as a reserve asset. Vice President JD Vance recently headlined a Bitcoin conference, emphasizing the administration’s support for the cryptocurrency industry.
Despite these initiatives, ethics experts have expressed concerns over potential conflicts of interest, given the Trump family’s personal investments in crypto-related ventures. Critics warn that the administration’s moves could favor personal gain over public policy and compromise regulatory integrity.
The Trump administration’s decision to rescind the “extreme care” guidance marks a significant shift in federal policy regarding cryptocurrencies in retirement plans. While this move may encourage more plan fiduciaries to consider including digital assets in 401(k) offerings, it also underscores the importance of prudent decision-making and thorough risk assessment. As the landscape of retirement investments evolves, both fiduciaries and investors must remain vigilant and informed about the opportunities and risks associated with cryptocurrency investments.