The Department of Labor's decision to rescind its 2022 guidance cautioning against the inclusion of cryptocurrency in 401(k) retirement plans sparked immediate backlash from investor advocates, who warn the move could expose millions of Americans to unnecessary financial risk.

Better Markets, a public interest group focused on financial reform, issued a sharply worded rebuke shortly after the announcement, accusing the administration of prioritizing crypto industry profits over retirement security.

"This is open season for the lawless crypto industry," said Stephen Hall, Legal Director at the organization. "By rescinding this guidance, the Department has effectively invited one of the most volatile and unregulated asset classes into the long-term savings accounts of working Americans."

The original 2022 guidance had urged fiduciaries to exercise "extreme care" before offering crypto investment options in employer-sponsored retirement plans. It was issued just months before a dramatic downturn in the crypto market — the so-called "Crypto Winter" — saw major platforms like FTX, Celsius, and BlockFi collapse, erasing billions in customer funds.

Critics argue the timing of the rescission is especially troubling. Despite high-profile failures and ongoing concerns about fraud, hacking, and lack of regulatory oversight in the digital asset sector, the rollback suggests a shifting tone among regulators. Enforcement efforts from agencies like the SEC and DOJ have also waned, Hall noted, creating a permissive environment for crypto to push further into mainstream financial products.

The risks aren't limited to market volatility, he added. Cryptocurrency’s role in facilitating cybercrime, sanctions evasion, and schemes targeting vulnerable populations — particularly seniors — remains a growing concern.

For retirement savers, the implications could be serious. While the DOL's decision removes a layer of federal caution, it does not alter the fiduciary obligations of pension plan managers. Those who fail to act in their clients’ best interest could still face legal liability.

“Removing the warning label doesn’t remove the risks,” Hall said. “Fiduciaries should still think twice — and act with extreme caution — before placing crypto into the retirement accounts of millions of Americans.”

As the debate over crypto's role in long-term investing continues, the decision marks a potential turning point in how digital assets are treated under federal retirement policy — and raises questions about who bears responsibility if the next crash hits close to home.

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