Is cryptocurrency suitable for retirement savings? This is what the US Department of Labor says.

Author: Shalini Nagarajan; Blockworks; Translation: Song Xue, LianGuai

A US federal judge has dismissed the lawsuit by ForUSAll against the Department of Labor (DOL).

This decision upholds the cautious position of the agency that cryptocurrency may not be suitable for retirement savings.

Last June, ForUSAll sued the US Department of Labor, claiming that its efforts to restrict cryptocurrency in retirement accounts were “arbitrary and capricious”.

In March of this year, the Department of Labor issued guidelines for 401(k) plans considering cryptocurrency investments and warned that investigations may be conducted on those offering such options.

After the announcement, ForUSAll claimed that about one-third of plan participants decided to no longer proceed out of fear of enforcement actions.

ForUSAll requested the court to rule that the department’s statement was unlawful and to have it revoked and overturned.

However, US Judge Christopher Cooper stated in a memorandum on Tuesday that even if the guidelines were revoked, it would not change the Department of Labor’s view on the risks associated with cryptocurrency nor its intention to scrutinize such products.

The judge stated that due to lack of demonstrated redressability, ForUSAll lacks standing to continue the lawsuit.

Cooper stated, “Without clear contrary evidence, it is difficult to fathom how this relief would restore business opportunities lost to ForUSAll, as it is doubtful that plan fiduciaries would ignore these lingering risks and work with ForUSAll if the relief itself is no longer effective.”

He added that retirement plans are unlikely to easily re-engage with ForUSAll as they are still bound by fiduciary responsibilities, which may be strictly enforced by a department that remains skeptical of cryptocurrency.

ForUSAll began offering alternative investment options in 401(k) plans in 2021, using Coinbase Custody and Trading for digital asset custody and transactions.

The company manages $1.5 billion in assets and serves over 80,000 retirement savers with over 500 plans, including clients such as Solana, TaxBit, and Uniswap.

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