US Department of Labor Urged to Rescind Crypto Guidance as Pushback Grows

  • US President’s Executive Order Calls for a Unified Approach to Crypto Regulation and Innovation
  • The Crypto Council for Innovation said Wednesday that the Labor Department’s guidance, issued in May, takes a one-sided approach to the nascent asset class.

A crypto industry body in the US is urging the Department of Labor (DOL) to reconsider its crypto guidance for retirement plans, amid growing pushback from concerned community members.

The Crypto Council for Innovation (CCI) said on Wednesday that the DOL’s guidance is inconsistent with White House directives and President Biden’s Executive Order for the nascent asset class.

In a letter written to the department’s Acting Deputy Secretary Ali Khawar, CCI asks the DOL to rescind its March Guidance Release #2022-01, which prevents 401(k) managers from including investment options in cryptocurrencies in their plans.

Regulators are now weighing whether to issue an official rule addressing the suitability of cryptocurrencies in 401(k) plans, Bloomberg reported Wednesday.

The DOL guidance imposes a higher standard of care for crypto compared to other financial options for 401(k)s by taking a one-sided and very negative view, according to CCI.

The DOL is tasked with overseeing the retirement security, health, and other workplace-related benefits of American employees.

It comes as the department faces a legal challenge from 401(k) provider ForUsAll, which filed its lawsuit earlier this month alleging that the department’s move to restrict the use of crypto in retirement plans is “arbitrary and capricious.” “.

A month after the DOL guidance was issued, Boston-based financial services provider Fidelity Investments moved to allow people to allocate a portion of their retirement savings to bitcoin through the 401 investment line. k) of the company.

“CCI is deeply concerned … based on an erroneous analysis of fact and law,” the council said in its letter. “We also urge the Department to begin a more open, inclusive and deliberative process to develop guidance for the inclusion of crypto assets in 401(k) investment menus.”

President Biden’s “Executive Order to Ensure Responsible Development of Digital Assets,” signed in March this year, calls for a unified approach to regulating and evaluating cryptocurrencies.

It was the first time the executive branch had signed such an order for the industry and was welcomed by investors and businesses alike, though it did not provide clearer regulatory guidance that many have called for.


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  • Sebastian Sinclair

    blocks

    Senior Reporter, Asia News Desk

    Sebastian Sinclair is a senior news reporter for Blockworks operating in Southeast Asia. He has experience covering the crypto market as well as certain developments affecting the industry, including regulation, business deals, and mergers and acquisitions. He currently has no cryptocurrencies. Contact Sebastian by email at [email protected]

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