The retirement plan fiduciary says warning about investigation of 401(k) plans that include cryptocurrency constitutes encroachment on private rights.
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ForUsAll, a 401(k) retirement provider, filed suit against the United States Department of Labor (DOL) and Martin Walsh as Labor secretary in U.S. District Court in Washington, D.C. on Thursday. The company is seeking the withdrawal of a DOL compliance assistance release issued in March, citing the Administrative Procedure Act, which safeguards against arbitrary official encroachment on private rights.
The DOL release warned that the department’s Employee Benefits Security Administration is expected to “conduct an investigative program” aimed at 401(k) plans that contain cryptocurrency. ForUsAll CEO Jeff Schulte told Cointelegraph:
“The government is suddenly trying to restrict the type of investments Americans can choose to make because they’ve decided today that they don’t like a certain asset class. […] They’re clearly trying to effect a ban and they don’t have the legal authority to do so.”
The DOL release has elicited a sharp response from several quarters. A group of 11 financial industry trade associations sent a letter to Acting Assistant Secretary Ali Khawar in April objecting to the “rulemaking nature” of the release without stating a position on the presence of cryptocurrency in retirement plans.
Later that month, 10 investor, consumer, worker and retiree organizations sent a letter to Khawar in support of the release, saying it is consistent with the Employee Retirement Income Security Act of 1974 that created the 401(k) program and imposed strict duties on plan fiduciaries.
Schulte said ForUsAll has about 150 companies that have signed up for 401(k) plans that include crypto, and ForUsAll intended to begin rolling out 401(k) plans that include crypto this summer.
“We have met with the Department of Labor last year,” Schulte said. “We have taken great pains to make sure that our program complies with all existing regulations and rules, and we are confident in the design of our program.”