{"id":42969,"date":"2025-06-13T09:31:03","date_gmt":"2025-06-13T09:31:03","guid":{"rendered":"https:\/\/isafespend.com\/?p=42969"},"modified":"2025-06-13T09:31:04","modified_gmt":"2025-06-13T09:31:04","slug":"heres-why-you-should-be-wary-of-401k-crypto-options","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=42969","title":{"rendered":"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options"},"content":{"rendered":"
\n

It seems you can\u2019t avoid crypto. It\u2019s everywhere. In ads. On X posts. And, maybe soon, in your 401(k).<\/p>\n

But is that a good thing?<\/p>\n

If you\u2019re thinking of dipping your toe into this undeniable buzz, it\u2019s crucial you conduct a little due diligence. Professional fiduciaries have been pondering the enigma wrapped in a mystery that calls itself cryptocurrency.<\/p>\n

What are their feelings about this highly volatile and complex digital asset? Why have so many been so reticent about adding this asset class to portfolios? How might their thoughts inform you?<\/p>\n

Why The DOL\u2019s 2022 401(k) Crypto Caution Stalled<\/h2>\n

Like any other hot investment, you only see the headlines trumpeting the good news. After all, no one ever goes to a cocktail party and enthusiastically brags, \u201cYou won\u2019t believe how much money I lost on this stock!\u201d The truth is, what goes up often goes down. And what goes up dramatically can just as quickly go down dramatically.<\/p>\n

It\u2019s this downside that most alarms (or should alarm) retirement savers. For this reason, the Department of Labor issued a release in 2022 that told 401(k) plan sponsors to proceed carefully before offering investment options based on digital currencies.<\/p>\n

\u201cThe DOL\u2019s Compliance Assistance Release No. 2022-01 cautioned plan fiduciaries to use extreme care when deciding whether to offer 401(k) plan participants cryptocurrency investment options,\u201d says Michelle Capezza, of counsel at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. in New York City. \u201cEBSA raised many concerns, including the possibility of fraud, the speculative and volatile nature of these investments, valuation, custodial and recordkeeping challenges, and difficulty for participants to make informed decisions. EBSA also warned about conducting investigations of plans that offered such investment options and questioned plan fiduciaries on their decisions to offer them in the plan. So, even though financial institutions brought products to market to facilitate these investments, including through digital asset accounts designed to address custody and cybersecurity issues, and through brokerage window models, the DOL guidance had a chilling effect on many plan fiduciaries and raised questions concerning whether they were subject to a new, heightened standard of extreme care review for cryptocurrency investments.\u201d<\/p>\n

Set aside the idea that this is about digital assets. Think instead about highly volatile stocks. As you approach retirement, you\u2019re more appreciative of certainty. The last thing you want is for your retirement savings to take a sudden drop just when you need to start withdrawing funds.<\/p>\n

That\u2019s the way fiduciaries think. They look out for what\u2019s best for you. It\u2019s what being prudent is all about.<\/p>\n

Now, there are those who feel it\u2019s one thing for a professional you willingly hire to take that demeanor. On the other hand, having the government tell you what to do? That just rankles some the wrong way.<\/p>\n

The 2025 Rescission: Neutrality, Not Endorsement<\/h2>\n

In effect, the DOL\u2019s 2022 advice merely reiterated what every fiduciary should always do. When the DOL recently rescinded that ruling, it did not remove that duty. The hurdles for adding cryptocurrency to 401(k) investment menus remain today as they always have.<\/p>\n

\u201cDOL has now issued Compliance Assistance Release 2025-01, formally rescinding the prior release and, importantly, reaffirming for fiduciaries the legal framework governing the evaluation of what particular investments should be included within a 401(k) plan,\u201d says Max Fuller, senior director of government solutions, TaxBit in Denver, Colorado. \u201cWhile the rescission is great, I am not sure it will result in the floodgates being opened for direct crypto investment within 401(k) plans just yet.\u201d<\/p>\n

It is this \u201cextreme care\u201d requirement that has fiduciaries walking on eggshells.<\/p>\n

\u201cThe new guidance opens up a Pandora\u2019s box of questions,\u201d says Lyle Himebaugh, managing partner at GGA Retirement in Stamford, Connecticut. \u201cThe first question is liability. I would imagine that most 3(38) investment fiduciaries are not equipped to do due diligence and therefore would not take on the liability.\u201d<\/p>\n

If fiduciaries continue to shy away from crypto, does that raise a red flag for you? Sure, they might be more concerned about potential liabilities than you might be. But that\u2019s precisely where the red flag pops up. Why?<\/p>\n

401(k) Crypto\u2019s Volatility Threatens Retirement Stability<\/h2>\n

The purpose of 401(k) plans is to provide long-term growth and, eventually, stability. This clashes with the inherent volatile nature of cryptocurrencies. The crypto risk magnifies as you approach retirement. But you can realize it at any age.<\/p>\n

\u201cGiven turnover rates and the volatility of closing prices, there is considerable risk that participants would realize a loss when assets are distributed at separation,\u201d says J. M. \u201cJack\u201d Towarnicky, of counsel at Koehler Fitzgerald, LLC in Powell, Ohio.<\/p>\n

This is the big challenge with cryptocurrencies. They\u2019re on 24\/7. If you invest in them, you\u2019ll have to be on your toes, ever watchful of what\u2019s happening in their markets. With digital assets like these, there are no \u201cclosing bells.\u201d Their prices can move at any time, day or night.<\/p>\n

Still, the positive shift in the regulatory tone means crypto fans may advocate for these investments to be included in their 401(k) plans. While plan sponsors may bow to these demands, their service providers are likely to remain skeptical.<\/p>\n

\u201cI am sure some investment fiduciaries will put them in the plan,\u201d says Himebaugh, \u201cbut there are so many unforeseen and incalculable risks that it will have a mild impact.\u201d<\/p>\n

Because of these issues, don\u2019t be surprised if digital assets fail to become a mainstream 401(k) option as quickly as some hope. For one thing, it\u2019s not just a decision of whether to include them, it\u2019s how to include them.<\/p>\n

\u201cThe challenges will the same as any asset class consideration,\u201d says Jason Grantz, CEO of Integrated Pension Group in Highland Park, New Jersey. \u201cThey\u2019ll have to prudently decide that having crypto available in plans is in the best interest of the participants, without conflict and not solely to appease a small handful of employees who might be clamoring for it. If the asset class does get added, the second hurdle will be even more daunting, which is to decide on which crypt or to simply offer a crypto fund, and that will need to pass Investment Policy criteria like other fund offerings.\u201d<\/p>\n

There\u2019s clearly retail interest in digital assets. It would not be a surprise if that interest spills over into the 401(k) realm. The rescission of the DOL\u2019s 2022 advice makes it harder for plan sponsors and their advisers to quickly rule out including cryptocurrency products on the plan\u2019s investment menu. The new DOL guidance, however, doesn\u2019t remove the best interest standards when evaluating the appropriateness of adding such investments to retirement plans.<\/p>\n

\u201cFiduciaries now face the usual significant challenges in evaluating cryptocurrencies for 401(k) plans,\u201d says Jonathan Rose, CEO of BlockTrust IRA in Beverly Hills, California. \u201cIssues like volatility, valuation uncertainty, custody risks, and changing regulatory oversight will be the focus, although each of these respective topics are making massive strides. The primary challenge fiduciaries will now face is a lack of experience in the cryptocurrency market itself, as demand from their clients increases. Many retail investors, 401(k) investors in particular, are looking for a solution that offers the unmatched upside of the crypto market with a minimized risk profile.\u201d<\/p>\n

Are professional fiduciaries the only ones wary of 401(k) crypto? Like annuities, the actual interest in these investments may be smaller than headlines would suggest.<\/p>\n

\u201cPrior to the 2022 guidance,\u201d says Towarnicky, \u201caccording to a GAO report, no surveyed 401(k) plan had added crypto as a core option, or a window to a crypto asset trading program, and less than 6 in 10,000 401(k) plans (about 300 total) offered crypto via self-directed brokerage windows.\u201d<\/p>\n

The regulatory bias against 401(k) crypto may be lifting, but that doesn\u2019t mean the fog has dissipated. The underlying risks remain significant. While the DOL has removed its heavy hand, it has not eliminated the fiduciary duty that goes with ERISA plans.<\/p>\n

Cryptocurrencies expose investors to extreme volatility and difficult pricing mechanisms. The potential for losses at distribution is very real.<\/p>\n

Does that mean you shouldn\u2019t invest a portion of your retirement assets in them? As with all investments, the decision depends on your individual circumstances. Making prudent decisions is the key, as the elements surrounding both your personal conditions and the cryptocurrency market are ever-changing.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

It seems you can\u2019t avoid crypto. It\u2019s everywhere. In ads. On X posts. And, maybe soon, in your 401(k). But is that a good thing? If you\u2019re thinking of dipping your toe into this undeniable buzz, it\u2019s crucial you conduct a little due diligence. Professional fiduciaries have been pondering the enigma wrapped in a mystery<\/p>\n","protected":false},"author":1,"featured_media":42970,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[],"class_list":{"0":"post-42969","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-retirement"},"yoast_head":"\nHere\u2019s Why You Should Be Wary Of 401(k) Crypto Options | iSafeSpend<\/title>\n<meta name=\"description\" content=\"It seems you can\u2019t avoid crypto. It\u2019s everywhere. In ads. On X posts. And, maybe soon, in your 401(k). But is that a good thing? If you\u2019re thinking of\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/isafespend.com\/?p=42969\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options | iSafeSpend\" \/>\n<meta property=\"og:description\" content=\"It seems you can\u2019t avoid crypto. It\u2019s everywhere. In ads. On X posts. And, maybe soon, in your 401(k). But is that a good thing? If you\u2019re thinking of\" \/>\n<meta property=\"og:url\" content=\"https:\/\/isafespend.com\/?p=42969\" \/>\n<meta property=\"og:site_name\" content=\"iSafeSpend\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-13T09:31:03+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-06-13T09:31:04+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/isafespend.com\/wp-content\/uploads\/2025\/06\/1749807064_0x0.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"998\" \/>\n\t<meta property=\"og:image:height\" content=\"665\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/isafespend.com\/?p=42969#article\",\"isPartOf\":{\"@id\":\"https:\/\/isafespend.com\/?p=42969\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/isafespend.com\/#\/schema\/person\/5b8c1c75336efaf09b163cd1eab0c9bf\"},\"headline\":\"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options\",\"datePublished\":\"2025-06-13T09:31:03+00:00\",\"dateModified\":\"2025-06-13T09:31:04+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/isafespend.com\/?p=42969\"},\"wordCount\":1414,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/isafespend.com\/#organization\"},\"articleSection\":[\"Retirement\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/isafespend.com\/?p=42969#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/isafespend.com\/?p=42969\",\"url\":\"https:\/\/isafespend.com\/?p=42969\",\"name\":\"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options | iSafeSpend\",\"isPartOf\":{\"@id\":\"https:\/\/isafespend.com\/#website\"},\"datePublished\":\"2025-06-13T09:31:03+00:00\",\"dateModified\":\"2025-06-13T09:31:04+00:00\",\"description\":\"It seems you can\u2019t avoid crypto. It\u2019s everywhere. In ads. On X posts. And, maybe soon, in your 401(k). But is that a good thing? If you\u2019re thinking of\",\"breadcrumb\":{\"@id\":\"https:\/\/isafespend.com\/?p=42969#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/isafespend.com\/?p=42969\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/isafespend.com\/?p=42969#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/isafespend.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/isafespend.com\/#website\",\"url\":\"https:\/\/isafespend.com\/\",\"name\":\"Solutions For Real\",\"description\":\"Latest Finance News and Updates\",\"publisher\":{\"@id\":\"https:\/\/isafespend.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/isafespend.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/isafespend.com\/#organization\",\"name\":\"Solutions For Real\",\"url\":\"https:\/\/isafespend.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/isafespend.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/isafespend.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png\",\"contentUrl\":\"https:\/\/isafespend.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png\",\"width\":690,\"height\":64,\"caption\":\"Solutions For Real\"},\"image\":{\"@id\":\"https:\/\/isafespend.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/isafespend.com\/#\/schema\/person\/5b8c1c75336efaf09b163cd1eab0c9bf\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/isafespend.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/isafespend.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png\",\"contentUrl\":\"https:\/\/isafespend.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/isafespend.com\"],\"url\":\"https:\/\/isafespend.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options | iSafeSpend","description":"It seems you can\u2019t avoid crypto. It\u2019s everywhere. In ads. On X posts. And, maybe soon, in your 401(k). But is that a good thing? If you\u2019re thinking of","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/isafespend.com\/?p=42969","og_locale":"en_US","og_type":"article","og_title":"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options | iSafeSpend","og_description":"It seems you can\u2019t avoid crypto. It\u2019s everywhere. In ads. On X posts. And, maybe soon, in your 401(k). But is that a good thing? If you\u2019re thinking of","og_url":"https:\/\/isafespend.com\/?p=42969","og_site_name":"iSafeSpend","article_published_time":"2025-06-13T09:31:03+00:00","article_modified_time":"2025-06-13T09:31:04+00:00","og_image":[{"width":998,"height":665,"url":"https:\/\/isafespend.com\/wp-content\/uploads\/2025\/06\/1749807064_0x0.jpg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/isafespend.com\/?p=42969#article","isPartOf":{"@id":"https:\/\/isafespend.com\/?p=42969"},"author":{"name":"News Room","@id":"https:\/\/isafespend.com\/#\/schema\/person\/5b8c1c75336efaf09b163cd1eab0c9bf"},"headline":"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options","datePublished":"2025-06-13T09:31:03+00:00","dateModified":"2025-06-13T09:31:04+00:00","mainEntityOfPage":{"@id":"https:\/\/isafespend.com\/?p=42969"},"wordCount":1414,"commentCount":0,"publisher":{"@id":"https:\/\/isafespend.com\/#organization"},"articleSection":["Retirement"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/isafespend.com\/?p=42969#respond"]}]},{"@type":"WebPage","@id":"https:\/\/isafespend.com\/?p=42969","url":"https:\/\/isafespend.com\/?p=42969","name":"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options | iSafeSpend","isPartOf":{"@id":"https:\/\/isafespend.com\/#website"},"datePublished":"2025-06-13T09:31:03+00:00","dateModified":"2025-06-13T09:31:04+00:00","description":"It seems you can\u2019t avoid crypto. It\u2019s everywhere. In ads. On X posts. And, maybe soon, in your 401(k). But is that a good thing? If you\u2019re thinking of","breadcrumb":{"@id":"https:\/\/isafespend.com\/?p=42969#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/isafespend.com\/?p=42969"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/isafespend.com\/?p=42969#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/isafespend.com\/"},{"@type":"ListItem","position":2,"name":"Here\u2019s Why You Should Be Wary Of 401(k) Crypto Options"}]},{"@type":"WebSite","@id":"https:\/\/isafespend.com\/#website","url":"https:\/\/isafespend.com\/","name":"Solutions For Real","description":"Latest Finance News and Updates","publisher":{"@id":"https:\/\/isafespend.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/isafespend.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/isafespend.com\/#organization","name":"Solutions For Real","url":"https:\/\/isafespend.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/isafespend.com\/#\/schema\/logo\/image\/","url":"https:\/\/isafespend.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png","contentUrl":"https:\/\/isafespend.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png","width":690,"height":64,"caption":"Solutions For Real"},"image":{"@id":"https:\/\/isafespend.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/isafespend.com\/#\/schema\/person\/5b8c1c75336efaf09b163cd1eab0c9bf","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/isafespend.com\/#\/schema\/person\/image\/","url":"https:\/\/isafespend.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png","contentUrl":"https:\/\/isafespend.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png","caption":"News Room"},"sameAs":["https:\/\/isafespend.com"],"url":"https:\/\/isafespend.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/isafespend.com\/index.php?rest_route=\/wp\/v2\/posts\/42969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/isafespend.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/isafespend.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/isafespend.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/isafespend.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42969"}],"version-history":[{"count":1,"href":"https:\/\/isafespend.com\/index.php?rest_route=\/wp\/v2\/posts\/42969\/revisions"}],"predecessor-version":[{"id":42971,"href":"https:\/\/isafespend.com\/index.php?rest_route=\/wp\/v2\/posts\/42969\/revisions\/42971"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/isafespend.com\/index.php?rest_route=\/wp\/v2\/media\/42970"}],"wp:attachment":[{"href":"https:\/\/isafespend.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/isafespend.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/isafespend.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}