Labor Department Lifts 2022 Crypto Ban in 401(k) Plans

The US Labor Department has made a significant shift in its stance on cryptocurrencies, particularly Bitcoin, in 401(k) retirement plans. On May 28, 2025, the department rescinded its 2022 guidance that had discouraged the inclusion of Bitcoin and other cryptocurrencies in these plans. This move allows fiduciaries to decide whether to include digital assets in retirement portfolios, restoring their control over investment decisions.

The 2022 guidance, issued during a period of regulatory caution, had warned plan fiduciaries to exercise “extreme care” when offering crypto investments. Although it did not outright ban crypto, it significantly deterred its adoption. The department's updated position now takes a neutral stance, allowing fiduciaries to make investment decisions based on their assessment of risk, liquidity, and compliance under existing Employee Retirement Income Security Act (ERISA) rules.

Secretary of Labor Lori Chavez-DeRemer stated that the rollback of the 2022 policy restores fiduciary control over retirement investments. She noted that the 2022 policy conflicted with the department’s obligation to remain neutral regarding investment types. Chavez-DeRemer also highlighted that the 2022 guidance may have violated ERISA’s provisions by implying policy preferences, which is against the law that requires fiduciaries to act solely in the interest of plan participants without bias toward specific assets.

The Labor Department’s updated position affects 401(k) plan sponsors and asset managers who had previously held back from offering Bitcoin. With the removal of restrictive language, crypto options may now return to investment menus. Several pension funds continued their exposure to crypto during the ban period, using ETFs to gain price exposure without directly holding Bitcoin, citing regulatory comfort with SEC-approved vehicles.

This reversal by the Labor Department comes amid broader changes in federal crypto policy. Since early 2024, several agencies have scaled back restrictions and reopened discussions on how to integrate digital assets. The Office of the Comptroller of the Currency (OCC) had earlier reinstated its 2020 guidance, allowing federally chartered banks to engage in cryptocurrency transactions. In parallel, the Securities and Exchange Commission (SEC) has dropped high-profile lawsuits against leading crypto companies and is now engaging with industry stakeholders through formal roundtables to gather feedback on regulatory frameworks.

At the state level, several regions have passed Strategic Bitcoin Reserve bills. These measures enable public pension funds to allocate part of their assets to Bitcoin under defined frameworks. The Texas legislation allows treasury allocations into BTC-backed ETFs. This shift in policy reflects a growing acceptance of cryptocurrencies as a viable investment option within retirement plans, provided that fiduciaries agree to the inclusion based on their assessment of risk and compliance.