San Francisco-based crypto-friendly retirement plan provider ForUsAll Inc. has filed a lawsuit against the United States Department of Labor (DOL) seeking to invalidate the department’s guidance on cryptocurrencies in 401(k) plans.
The DOL advised retirement fiduciaries against cryptocurrency investments while citing risks associated with the asset class. The department also noted that it would launch an investigative program to scrutinize retirement providers that add crypto to their investment plans.
However, ForUsAll was not happy about the DOL’s guidance and has taken legal action against the department.
Crypto-Friendly Retirement Plan Provider Sues DOL
In a complaint filed earlier this week in U.S. District Court in Washington, D.C., ForUsAll accused DOL of infringing on the rights of American investors to choose how to invest in their retirement accounts.
The plaintiff also cited the DOJ for violating the Administrative Procedure Act (APA), which states that agencies must go through public notice and comment processes before the establishment of any rules or guidance.
The retirement services company claims that the DOJ failed to follow these procedures before publishing its guidance advising against crypto investments in 401(k) plans.
The DOL was also charged with non-compliance with the Employee Retirement Income Security Act (ERISA) established in 1974 to protect investors’ funds.
ForUsAll argued that the DOL’s “arbitrary and capricious” warning against the inclusion of cryptocurrencies in retirement plans and threats of conducting “investigative programs” on fiduciaries that offer such services to investors might put a “concerning precedent for future announcements by any Administration about what investments are permissible.”
The company also noted that ERISA does not categorize any assets to be “presumptively imprudent,” nor does it “mandate paternalism” regarding retirement investments.
“Cryptocurrency is a widely accepted asset class. Tens of millions of Americans have included it in their portfolios, as have some of the nation’s largest institutional investors, including Harvard University’s endowment,” the complaint stated.
President Biden Issues Executive Order on Crypto
ForUsAll also cited President Biden’s executive order on cryptocurrencies, which approved the use and promotion of such assets as a policy of the United States.
The document also outlined how digital assets can benefit the U.S. government and its citizens, thereby urging various federal agencies to collaborate on the regulation of the asset class.
