May 28 (UPI) — The Trump administration on Wednesday revoked Biden-era guidance on cryptocurrency-related 401 (k) plans and other digital assets.
President Donald Trump’s U.S. Labor Department withdrew full guidance put in place in 2022 by then-President Joe Biden’s administration. It advised American companies to exercise “extreme care” prior to allowing crypto-related retirement investments as an option for employees.
It cited “serious concern” over the level of negative exposure for investors given reports of “significant risks of fraud, theft and loss” and with crpyto linked to ISIS and other acts of international terrorism.
Now, the department says it’s “neither endorsing, nor disapproving of” employers who opt to add cryptocurrency to a list of 401 (k) investments, adding that Trump’s policy change will extend to a “wide range” of other digital assets such as tokens, coins, crypto assets “and any derivatives thereof.”
On Wednesday, U.S. Labor Secretary Lori Chavez-DeRemer said the Biden White House attempted to “put their thumb on the scale” to discourage crypto investing.
Trump’s Labor Department said in a compliance assistance bulletin that prior to Biden’s 2022 guidance, the department had “usually articulated a neutral approach to particular investment types and strategies.”
“We’re making it clear that investment decisions should be made by fiduciaries, not DC bureaucrats,” the secretary posted to social media.
It said a standard of “extreme care” cited by Biden’s Labor Department was reportedly “not found” in the Employee Retirement Income Security Act, or ERISA, which gives a fiduciary duty to employers that oversee 401(k) investments.
“In reality, it’s saying we should treat crypto like any other asset,” Philip Chao, a certified financial planner and retirement investment consultant, told CNBC.
The shift arrived as the White House has exuberantly embraced the crypto industry while the president’s crypto wealth has ballooned on paper through his own meme coin and as his two eldest sons pursue other crypto-related business ventures amid calls for ethics investigations.
Last month, the U.S. Department of Justice ended its National Cryptocurrency Enforcement Team and redirected focus away from targeting crypto fraud.
Deputy Attorney General Todd Blanche said DOJ will “no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets” as Trump allegedly has “actual regulators do this work outside the punitive criminal justice framework.”
On Tuesday, Trump’s Truth Social platform announced its plans to establish a $2.5 billion “bitcoin Treasury.”
Meanwhile, Vice President JD Vance was scheduled Wednesday to deliver a keynote address at a bitcoin conference in Las Vegas.
Chao, founder of Experiential Wealth in Cabin John, Md., says crypto is “such a new thing and there’s no regulation or protection, even a reasonable understanding of it.”
“And there still isn’t enough,” Chao stated.
