The US Department of Labor has been sued by a 401(k) plan administrator over its cryptocurrency policies. “This lawsuit seeks to protect the rights of American investors to choose how to invest money in their own retirement accounts.”
US Department of Labor Sued Over Crypto Guidance
The US Department of Labor (DOL) and Secretary of Labor Martin J. Walsh have been notified of Compliance Assistance Release No. 2022-01 of the Ministry sued. The guidelines, titled “401(k) Plan Investments in ‘Cryptocurrencies’,” were issued on March 10.
The lawsuit alleges that the Department of Labor violated its legal jurisdiction by threatening “an investigative program” aimed at plan sponsors offering digital assets.
According to the court document:
This lawsuit aims to protect the rights of American investors to choose how to invest money in their own retirement accounts.
The plaintiff is Forusall Inc., which provides administration and other services for pension plans. The company claims to be “the first company to announce that it would make cryptocurrency available to 401(k) plan participants through a self-paced window,” according to the lawsuit’s details.
The complaint states:
DOL’s issuance of the Release was arbitrary, arbitrary and otherwise unlawful and beyond DOL’s legal jurisdiction, authority or limitations and is therefore “unlawful and [shall be] put aside.’
Following the Department of Labor’s crypto guidelines, Fidelity Investments Inc. announced that it would allow Bitcoin in 401(k) accounts.
Fidelity’s decision worried the Department of Labor. “We are seriously concerned about what Fidelity has done,” said Ali Khawar, acting assistant secretary of the Labor Department’s Employee Benefits Security Administration.
The financial services company’s decision to allow Bitcoin in 401(k) retirement accounts has also raised concerns from some lawmakers, including U.S. Senator Elizabeth Warren (D-MA). She then sent a letter to Abigail Johnson, the CEO of Fidelity Investments, questioning the financial services giant’s plan to allow Bitcoin investments in 401(k) accounts.
Some lawmakers, on the other hand, are concerned about the Labor Department’s attempt to block Americans from investing in crypto assets for retirement. In response to the DOL’s crypto guidance, US Senator Tommy Tuberville (R-AL) introduced the Financial Freedom Act. Lawmakers described the bill as “legislation to prohibit the United States Department of Labor (DOL) from issuing regulation or guidance that restricts the types of investments that self-directed 401(k) account investors can select through a broker window.”
What do you think of this lawsuit against the Department of Labor? Let us know in the comment section below.
photo credit: Shutterstock, Pixabay, WikiCommons
Disclaimer: This article is for informational purposes only. It is not a direct offer, or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.