Cryptocurrency Investments Through 401(k) Plans, Hosted by The Taxation Community's Employee Benefits Committee
If you watched the Super Bowl, you know that cryptocurrency broke into the mainstream in a significant way in 2022. Reports are that 16% of U.S. adults have held or used crypto. More recently, high profile crashes in crypto markets have been a stark reminder of the volatility of the asset class.
The retirement sector has taken notice. In March, the U.S. Department of Labor published Compliance Assistance Release No. 2022-01, advising plan fiduciaries to "exercise extreme care" before adding a cryptocurrency option to a 401(k) plan's investment menu. Undeterred, in April, Fidelity (which reportedly serves more than one-third of the 401(k) plan market) announced it would permit plan sponsors to offer their plans' participants the opportunity to allocate up to 20% of their accounts to a Bitcoin investment option, beginning in mid-2022. In turn, Acting Assistant Secretary of EBSA Ali Khawar told the Wall Street Journal "[w]e have grave concerns with what Fidelity has done."
Where will things go from here?
Partner Kris Zanotti and Percy Lee, an associate at Ivins, Phillips & Barker, who have been closely monitoring these developments, will provide their insights and perspective.
- Employee Benefits Committee of the D.C. Bar Taxation Community
This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. Any views expressed herein are those of the author(s) and not necessarily those of the law firm's clients.