The guidance

On March 10, 2022, DOL issued Compliance Assistance Release No. 2022-01. The guidance points out that:

• Cryptocurrencies are speculative and volatile investments.
• It’s a challenge for plan participants to make informed investment decisions about cryptocurrencies.
• There are custodial and recordkeeping concerns as well as valuation concerns about cryptocurrencies.
• The regulatory environment for cryptocurrencies is evolving.

In the Compliance Release, the DOL specifies some of the facts and circumstances that it expects plan fiduciaries to consider and warns fiduciaries to be extremely cautious. The DOL also states its belief that, at least with respect to cryptocurrencies, a fiduciary has a duty to look at whether what is being offered under a brokerage window is prudent.

Implications for plan sponsors

The DOL warns plan fiduciaries who do not follow the Compliance Release and decide to include cryptocurrencies in their plan’s portfolio can expect a DOL investigation.