U.S. 401(k) Crypto Proposal Leaves Asset Types Unspecified, With Altcoin Access Still Facing Barriers

According to ChainCatcher, a U.S. Department of Labor proposal allowing 401(k) plans to invest in cryptocurrencies and other alternative assets was submitted Thursday to the White House Office of Information and Regulatory Affairs for final review. The proposal aims to simplify the process for offering alternative investments and provide employers and plan administrators with some legal protections. The version published in March does not specify which digital assets may be included or set a minimum market-cap threshold. It requires plan administrators to assess six factors: performance, fees, liquidity, valuation, benchmarks and complexity. Bellementis PLLC Managing Partner Teresa Goody Guillén said Bitcoin and Ethereum could be adopted first because of their more mature markets and investment products, but altcoins are not automatically excluded. Administrators would need to show that their investment choices meet standards for prudence, liquidity, valuation and investor protection. Trace Finance Co-Founder and CEO Bernardo Brites said some smaller tokens may struggle to meet historical performance and benchmark requirements. The proposal does not limit crypto investments to ETFs or managed funds, though Guillén expects those products may precede direct holdings.