Pension fund sued the US Department of Labor for criticizing crypto investments

ForUsAll is seeking the withdrawal of a release that says the agency will “conduct an investigative program” aimed at 401(k) plans containing digital currencies

03.06.2022 - 12:40

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What’s new? ForUsAll, a platform that specializes in investing retirements from 401(k) accounts in cryptocurrency, has sued the US Department of Labor (DOL) and its head, Martin Walsh. The platform is seeking the withdrawal of a DOL release issued in March, in which the agency warns of the risks of investing retirement savings in cryptocurrencies. The document also says the agency will “conduct an investigative program” aimed at 401(k) plans containing cryptocurrency. In the lawsuit, ForUsAll cites the Administrative Procedure Act, which protects against arbitrary official encroachment on private rights.

ForUsAll’s lawsuit

Other companies’ reactions to the Labour Ministry’s initiative. In April, a group of 11 trade associations sent a letter to Ali Khawar, acting assistant secretary for the Employee Benefits Security Administration, Department of Labor, objecting to the “rulemaking nature” of the said release.

Later the same month, 10 organizations sent a letter to Khawar in support of the document. They said it was in line with the Employee Retirement Income Security Act of 1974, which imposes strict duties on fiduciaries of 401(k) retirement accounts.

What happened before? On April 26, Fidelity Investments, US holding company, reported that it would allow 401(k) retirement savings account holders to directly invest in bitcoin. MicroStrategy already agreed to participate in the program.

The Labour Department criticized Fidelity’s initiative, saying it “risks the retirement security of Americans.” Ali Khawar also added that the department scheduled a meeting with representatives of the company.

In early May, Democratic Senators Elizabeth Warren and Tina Smith sent a letter to Fidelity in which they called investing in cryptocurrencies a “risky and speculative gamble.”

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