Crypto and Retirement Plans: Fiduciary Considerations

Recently, cryptocurrency has made headlines as an alternative investment offering high returns but with significant volatility. It was only a matter of time before questions emerged about whether this asset class belonged in retirement plans. Plan fiduciaries, those charged under ERISA with acting prudently and in the best interests of participants, have found themselves at the center of this evolving debate.

Back in 2022, the Department of Labor (DOL) issued strong guidance urging fiduciaries to exercise “extreme caution” before adding cryptocurrency to a 401(k) plan’s investment lineup. The warning went beyond investment prudence, cautioning that plans offering cryptocurrency could expect heightened regulatory scrutiny, including potential DOL audits. For many plan sponsors and fiduciaries, this was a clear signal to steer clear of the asset class.

Fast-forward to 2025, and the DOL has rescinded its earlier guidance, leaving no active rules that either support or prohibit cryptocurrency investments in benefit plans. While this might seem like a green light, fiduciaries are still bound by ERISA’s standards of prudence, diversification, and loyalty to participants.

Adding to the complexity, President Donald Trump signed Executive Order 14330 in August 2025, directing the DOL, SEC, and Treasury to revise regulations within 180 days to permit alternative assets including cryptocurrency in 401(k) plans. This signals a policy shift toward broader investment choice, but it does not immediately authorize crypto in retirement menus. Until new rules and safe harbor provisions are finalized, fiduciaries remain in a gray zone and should proceed with caution.

Institutional adoption is accelerating this trend. BlackRock, Fidelity, and VanEck have launched Bitcoin and Ethereum ETFs with billions in assets, and Vanguard is reportedly considering allowing cryptocurrency ETF trading on its platform. Registered Investment Advisors (RIAs) are also moving aggressively: Morgan Stanley now allows its financial advisers to offer crypto funds, including Bitcoin and Ethereum ETFs to clients, including those with IRAs and 401(k)s. Other major investment advisers like Merrill Lynch, Wells Fargo, and UBS are expected to follow suit soon after. While these moves signal growing legitimacy for digital assets, they do not reduce fiduciary obligations under ERISA. Plan sponsors must still weigh volatility, participant understanding, and regulatory uncertainty before adding crypto options to retirement menus.

The lack of formal guidance does not mean cryptocurrency is without challenges in the retirement plan space. Several factors continue to weigh heavily on fiduciary decision-making:

While the DOL’s withdrawal of its negative guidance may reduce immediate regulatory pressure, it has also created uncertainty. Fiduciaries remain in a challenging position: balancing employee interest in emerging asset classes with their obligation to act prudently and minimize risk.

At CSH, we understand that this is not just an investment question but a fiduciary one. Our employee benefit plan audit and qualified plan consulting teams work with organizations to assess compliance risks, strengthen fiduciary processes, and evaluate emerging issues like cryptocurrency. As the regulatory environment continues to shift, we help clients stay informed and make decisions that protect both their employees and their organizations.

The bottom line: Cryptocurrency in retirement plans remains a high-risk proposition. Fiduciaries must tread carefully, documenting their processes, considering participant demographics, and staying alert to regulatory changes. With the right guidance, prudent processes, and oversight, organizations can navigate this evolving landscape responsibly.