401(k) plan provider ForUsAll has filed suit against the U.S. Department of Labor (DOL) and its head Marty Walsh. The firm seeks to overturn a compliance order from the agency regarding investments in cryptocurrency, Decrypt reports.
In the lawsuit, it cites the DOL’s March 10 compliance release. ForUsAll argues that it violates the Administrative Procedure Act, which protects private rights from arbitrary government action.
The document states that the agency “will conduct an investigation” into 401(k) plans containing cryptocurrency.
“The government is suddenly trying to restrict the type of investments […] because it does not like a certain class of assets. […] They are clearly attempting to impose a ban, they have no legal authority to do this,” — said Cointelegraph CEO ForUsAll Jeff Shulte.
According to him, the company has about 150 employers signed up for 401(k) plans that include digital assets. ForUsAll had planned to roll out the product in the summer.
“We have put in a lot of effort to ensure that our program complies with all existing norms and rules”, — explained Shulte.
In April, 11 financial-industry trade associations sent Acting Assistant Secretary of Labor Ali Havaru a letter voicing objections to the directive’s rulemaking character. It did not state the signatories’ position on the presence of cryptocurrency in retirement plans.
Later, ten organisations sent a letter to the official in support of the directive. They emphasised that the document complies with the Employee Retirement Income Security Act of 1974, which imposes strict duties on fiduciaries of 401(k) accounts.
In April, Fidelity Investments announced a service allowing clients to accumulate bitcoin on 401(k) retirement accounts. It later emerged that the U.S. Department of Labor was concerned by Fidelity’s initiative.
In May, Republican Senator Tommy Tuberville introduced a bill, authorizing Americans to accumulate cryptocurrency on 401(k) plans.
In the same month, his colleague Senator Cynthia Lummis outlined details of the bill on regulating cryptocurrencies in the United States. According to her, the document would allow the integration of the digital asset class into 401(k)s.
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