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.