Crypto’s 401(k) Path Reaches White House Review

Key Takeaways

• Labor rule on 401(k) picks reaches White House
• Legal presumption would protect process, not specific products
• Ongoing monitoring sits outside the proposed safe harbor
• Supreme Court weighs benchmark test in Intel case

The Office of Information and Regulatory Affairs, the White House unit that vets major rules, received the final-stage version on November 5, according to its official review record. The record classifies the rule as economically significant and lists no legal deadline, meaning no statute or court order sets a completion date. Under Executive Order 12866, review generally runs up to 90 days and can be extended. The record does not show which parts of the March proposal changed.

Why 401(k) menus have stayed conservative

A 401(k) menu is chosen by fiduciaries: the employer, an investment committee or an adviser it appoints. Under the Employee Retirement Income Security Act (ERISA), they must act with the care of a prudent expert, and participants can sue them when a choice falls short.

That threat has shaped what workers are offered. Figures cited in the department’s March proposal show that only 4% of defined contribution plans offered any alternative investment in 2024, and that alternatives held about 0.1% of those plans’ assets. The same document cites a 2025 American Benefits Council survey in which roughly 29% of employer members said they had passed on investment options or services simply because similar plans were not using them.

Crypto faced an extra hurdle. The department’s 2022 guidance told fiduciaries to exercise “extreme care” before adding it, until a May 2025 rescission notice restored a neutral stance. After that warning was withdrawn, Executive Order 14330 followed in August 2025. It directed the department to clarify fiduciary duties for funds holding alternative assets and to prioritize curbing litigation. Its definition of alternatives includes actively managed vehicles that invest in digital assets.

A presumption that favors the decision-maker

The proposal’s answer to that litigation pressure is a process-based safe harbor. When a fiduciary objectively, thoroughly and analytically works through six listed factors and reaches a determination on them, its judgment on those factors would be presumed reasonable and given substantial weight by courts.

Courts already assess prudence by the process followed at the time of the decision, not by later returns. A codified presumption would add a written standard that a plan committee can point to when it argues its process met that bar. The proposal estimates the change would save plans money overall, largely through lower litigation exposure.

The text also states that ERISA “does not require or restrict any specific type” of menu investment. Crypto gets no special category, favorable or otherwise. ERISA’s separate loyalty and conflict-of-interest rules are left untouched.

Three routes into a retirement account

The rule covers investments a plan places on its menu, including qualified default investment alternatives: the funds where contributions land when a worker makes no choice, usually target-date funds. That scope leaves three distinct paths for crypto exposure.

A standalone menu option. The worker decides whether to use it, within limits the plan sets. Fidelity’s workplace Digital Assets Account, announced in 2022, follows this model. It holds Bitcoin alongside short-term money market investments, and employers set contribution and exchange caps.

A sleeve inside a diversified fund. A manager holds some crypto within a broader mandate. If that fund is the plan’s default, a worker could own crypto indirectly without ever selecting it. Asset allocation funds of this kind were the format Executive Order 14330 singled out.

A brokerage window. Participants buy from a wider marketplace beyond the menu. The proposal places this route outside its definition, noting that fiduciary principles may apply somewhat differently there. It neither blocks crypto purchases through a window nor brings them under the new presumption.

Six tests a crypto product would have to pass

None of the six factors behind the safe harbor is crypto-specific. Each, however, raises a sharper question for a digital-asset product than for a plain index fund.

Performance

Rule asks: risk-adjusted returns, net of fees, over a horizon suited to the workforce and its capacity for risk.

Crypto test: the same price swings land very differently on a 25-year-old and on someone five years from retirement.

Fees

Rule asks: cost justified by the value delivered; the cheapest comparable option is not required.

Crypto test: custody, trading spreads and fund expenses can stack, so the full layered cost is the figure to compare.

Liquidity

Rule asks: options need not be fully liquid, but any liquidity promised to participants must hold up, including when other investors redeem.

Crypto test: round-the-clock markets do not guarantee a fund can meet a wave of exits on its own stated terms.

Valuation

Rule asks: timely, accurate pricing; holdings priced on regulated U.S. securities exchanges get the simplest path.

Crypto test: a fund holding listed spot Bitcoin ETFs could plausibly use that path; one holding coins directly must document its pricing source and cutoff time.

Benchmarking

Rule asks: a meaningful comparator for every option; blended composite benchmarks are acceptable.

Crypto test: a sleeve with a short record likely needs a custom composite, like the one the proposal builds for a private-equity sleeve in its own example.

Complexity

Rule asks: fiduciaries understand the product well enough to oversee it, or bring in a qualified adviser.

Crypto test: custody, key management and the handling of forks or staking sit outside most plan committees’ experience.

The benchmark question has reached the Supreme Court

One of those six factors is already before the justices. In Anderson v. Intel Corp. Investment Policy Committee, participants argue that Intel’s fiduciaries were imprudent in building custom target-date and diversified funds with allocations to hedge funds and private equity, and that those funds underperformed. The Ninth Circuit dismissed the claims because the plaintiffs had not identified a meaningful benchmark: a genuinely comparable investment showing what a prudent choice would have earned.

The Court heard argument on October 6, with the Solicitor General arguing on Intel’s side, and has not ruled. The case concerns what a complaint must show to proceed. It does not ask whether alternatives belong in 401(k) plans at all.

The link to crypto is direct. The proposal defines a meaningful benchmark as a comparator with similar mandates, strategies, objectives and risks, and says new designs face no presumption against them. For a crypto sleeve with few close peers, the choice of comparator is itself a judgment a plaintiff can attack. The Intel ruling would set how much of that argument a plaintiff must win before reaching discovery, the costly stage the proposal identifies as the main source of settlement pressure on plans.

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Where the legal cover stops

The Supreme Court has twice held that a fiduciary’s job continues after an investment goes on the menu: in Tibble v. Edison International in 2015, and in Hughes v. Northwestern University in 2022, which affirmed a continuing duty to monitor every option and remove those that no longer fit.

The March proposal states plainly that it does not address that monitoring duty. The department said it expects to issue interpretive guidance on monitoring in the near term and that, in its view, the same factors would apply. Interpretive guidance carries less legal force than a codified presumption, and the published final rule is the only place to see whether that gap was narrowed.

For crypto, the gap is wider because more can change after approval. A product can alter its holdings, custodian, fees or redemption terms. A workforce can also age into years when a deep drawdown does more damage. Existing Labor Department guidance on target-date funds already expects periodic review of a fund’s strategy, management and fees, including charges inside its underlying investments.

The proposal also shows how a mid-course change is treated. In one of its examples, adding hedge funds and private equity to an existing default target-date fund counts as selecting a new investment. Under that reasoning, a default fund that adds a digital-asset sleeve would restart the analysis instead of inheriting its earlier approval.

What would show money is moving

The first markers are legal ones: final text in the Federal Register with an effective date, whatever it says about monitoring, and the Intel ruling. None of these, by itself, moves a dollar of retirement savings into crypto.

Adoption would show up in named employers adding a crypto option, target-date providers disclosing digital-asset sleeves, and plan filings reporting the amounts actually invested.

Checking your own plan

• Ask the plan administrator whether any fund you already hold, including your default fund, has a digital-asset allocation.
• Read the product’s fact sheet to see whether it holds coins, exchange-traded fund shares or futures.
• Total the cost, including trading or custody charges that sit outside the expense ratio.
• Look for caps on how much you can contribute or transfer in, and any restrictions on moving money back out.

Until those disclosures appear, the rule’s practical reach is narrower than the headlines around it. It would make one decision easier to defend, while a crypto option would still have to justify its place at every review that follows.