The Trump administration has reversed a Biden-era rule that required employers and fund managers to “exercise extreme caution” before including crypto into retirement savings plans.
Trump Administration Loosens Crypto Retirement Saving Rules, Reversing Biden-Era Guidance
30 May 2025 - 17:15 CEST
While the new Department of Labor guidance stops short of officially endorsing crypto for use in so-called 401(k) plans, it grants sponsors more flexibility to include tokens, coins, crypto assets and derivatives in portfolios.
New responsibilities
This move is the latest in a series of crypto-friendly policies from the Trump administration, which has made it a priority to legitimize digital assets as a formal investment class. Though likely to be welcomed by crypto advocates and some investors, financial experts are warning of heightened ethical concerns, given the relative immaturity of the crypto market and, therefore, its potential price volatility.
Knut Rostad, President of the Institute for Fiduciary Standard, a nonprofit organization that promotes fiduciary standards for financial advisors, has expressed concerns.
“The cautionary guidance provided by the department in the prior administration was very appropriate to reflect the purpose of the retirement account,” Rostad said. “That caution light has been removed and has been replaced by a bright green light.”
Duties to investors
Crypto supporters, however, argue that removing restrictive regulations is a necessary step toward legitimizing digital assets and encouraging institutional investors such as retirement or pension funds and other asset managers to take part in digital markets.
Despite the relaxed rules, fund managers remain legally obliged to act in the best interests of 401(k) investors. If crypto assets become more common in retirement plans, a sharp downturn in the value of the assets may provoke a wave of lawsuits. Even with the best intentions, managers may still expose investors to risks which may not yet be fully understood.
A converse risk is that fund managers who do not invest in crypto could equally face legal action if they have not capitalized on price increases. The Department of Labor guidance therefore provides both increased opportunities and increased risks.
