21.4 C
New York

U.S. Department of Labor Warns Adding Crypto in Retirement Plans

Date:

U.S. Department of Labor Warns Adding Crypto in Retirement Plans

The U.S. Department of Labor (DOL) has urged caution to exercise “extreme care” while considering crypto as an option in the 401(k) plan’s investment. In a compliance report released on Thursday, the department issued a warning for employers who seek to increase their 401(k) exposure to cryptocurrencies, stating that any significant crypto investments within company-sponsored retirement accounts might lead to legal investigation. “These investments present significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft, and loss,” the report reads. The 401(k) is a retirement savings plan offered by American employers that seeks to provide long-term financial security along with extended tax benefits. “At this early stage in the history of cryptocurrencies, however, the U.S. Department of Labor has serious concerns about plans’ decisions to expose participants to direct investments in cryptocurrencies or related products, such as NFTs, coins, and crypto assets,” the report added. Regarding the legislation surrounding 401(k) investments, it does not actually specifically detail on which asset classes must be included. However, it does emphasize to “show the care, skill, prudence, and diligence that a prudent person would exercise” when making investment choices “in order to minimize the risk of large losses.”

The post U.S. Department of Labor Warns Adding Crypto in Retirement Plans appeared first on Cryptoknowmics-Crypto News and Media Platform.

Related articles

spot_img

Recent articles

spot_img