He said: “At this early stage in the history of cryptocurrencies … the US 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 Department of Labor warned that employers who add cryptocurrency investments to company 401k plans may be breaking their legal obligations.
However, financial service firms have begun marketing these investments as retirement plan options to growing popularity.
Employers who offer 401(k) plans have a legal duty to select investments prudently and monitor them on an ongoing basis.
Over the last decade however, there have been a number of lawsuits alleging that workers have lost money due to excessive costs and unwise fund choices.
On Thursday, the Labor Department outlined the risks and challenges of investing in cryptocurrencies in a memo.
One issue is that the digital currencies are speculative, volatile and hard to handle.
It can also be difficult for investors to make an informed investment decision.
He said: “The big question coming into the executive order was whether it was going to be balanced, whether it was going to talk about both the risks and the opportunities of crypto.
“It’s pretty close to the outcome we were all hoping for.”