The U.S. Department of Labor (DOL) is warning investment firms to “exercise extreme care” before adding crypto to their retirement plans.
In a new statement, the department says it has serious concerns about fiduciaries who expose 401(k) participants to crypto assets.
“These investments present significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft, and loss….”
The DOL cites crypto’s volatility, uncertain valuations and evolving regulatory environment as reasons for concern.
The department also argues it is difficult for 401(k) plan participants to make informed decisions about the digital asset sector.
“These investments can all too easily attract investments from inexpert plan participants with great expectations of high returns and little appreciation of the risks the investments pose to their retirement investments.
Cryptocurrencies are very different from typical retirement plan investments, and it can be extraordinarily difficult, even for expert investors, to evaluate these assets and separate the facts from the hype.”
Additionally, the DOL argues that crypto presents custodial concerns for investors, noting that hacks or even simple loss of passwords could result in the permanent loss of an asset.
The DOL’s statement comes on the heels of President Joe Biden’s crypto-focused executive order on Wednesday.
The order tasks multiple US agencies with exploring the best ways to ensure Americans are protected as they invest in the growing crypto economy.
Specifically, the White House says regulations must protect American consumers, investors and businesses as well as mitigate the illicit use of digital assets and the potential for any systemic risk posed by the industry.
Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inboxCheck Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/bluecrayola/Fotomay
