The lawsuit “seeks to preserve the rights of American investors to choose how to invest money in their own retirement accounts.”

Key Takeaways

A 401(k) provider is suing the Department of Labor over its aggressive anti-crypto stance.
The Department stated in March it would investigate any company allowing cryptocurrency allocations to be part of their retirement plan.
The news follows Fidelity Investments’ April announcement that it will allow its customers to allocate up to 20% of their 401(k) retirement accounts into Bitcoin.

Share this article

ForUsAll, a 401(k) provider based in San Francisco, is suing the Labor Department over its recent decision to investigate companies offering clients the option to allocate a portion of their retirement plans into cryptocurrency.

“Arbitrary, Capricious, and Otherwise Not In Accordance With Law”

A 401(k) provider has filed a complaint against the U.S. Department of Labor (DOL) in a bid to invalidate the department’s recent choice to investigate companies offering cryptocurrency allocations as part of their retirement plans. It called the decision “arbitrary, capricious, and otherwise not in accordance with law.”

ForUsAll, a San Francisco-based company, markets itself as the “first 401(k) platform to provide access to cryptocurrency.” Its other services include client exposure to Mutual and ESG funds for low fees. The company announced last year a deal with crypto exchange Coinbase which would allow ForUsAll customers to invest up to 5% of their 401(k) contributions in Bitcoin, Ethereum, and other cryptocurrencies.

The company does not stand alone. Fidelity Investments, the fourth largest asset manager globally with over $4.2 trillion in assets under management, declared last month that it would allow investors to allocate up to 20% of their 401(k) retirement accounts into Bitcoin. It also recently decided to expand its Digital Assets subsidiary in order to offer investors exposure to Ethereum.

The DOL has issued warnings to 401(k) providers over their crypto plans, stating in a release this March that cryptocurrencies were “speculative and volatile investments” that offered custodial, recordkeeping, valuation, and regulatory concerns. These considerations were sufficient for the DOL to “conduct an investigative program aimed at plans that offer participant investments in cryptocurrencies” and to “take appropriate action to protect the interests of plan participants.”

ForUsAll has stated to the Wall Street Journal that “about 150 of the 500 companies that use its 401(k) services have signed agreements that include the cryptocurrency option” though a third of the clients it has spoken to since the DOL’s guidance release have decided to wait before offering the option. ForUsAll’s customers have on average 160 employees and $3 million in 401(k) assets.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies. 

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Recommended News

Read More