Richard Neal, Chairman of the United States House of Representatives Ways and Means Committee, wrote a letter asking the Government Accountability Office to provide feedback on cryptocurrency use in retirement plans. The lawmaker stated that defined contribution plans such as the 401 (k) allow savers to include cryptocurrency in their plans. However, concerns have been raised about crypto’s volatility, lack of oversight, and the limited oversight.
Neal requested that the GAO compile a list listing crypto-friendly firms for their 401(k), with an indication of how much they are used. Neal also requested a description of how cryptocurrency is administered in these plans, as well as an assessment of their regulatory oversight and guidance. The GAO publishes analysis and recommendations on a variety of important issues to the U.S. legislative. The GAO’s findings are not legally binding.
Neal’s letter follows a statement by Marty Walsh, Labor Secretary, to the House Education and Labor Committee, that his department was considering a rulemaking regarding crypto in retirement plans. In March, the Labor Department (DOL), in compliance assistance release, promised that it would conduct an investigation into plans that allow participants to invest in cryptocurrencies or related products.
Fidelity Investments (a major provider of 401(k),) began offering crypto options as part of its retirement plans in April, despite the DOL’s statements. Senator Elizabeth Warren, a prominent crypto skeptic, reacted strongly to the move and demanded explanations on how Fidelty would deal with crypto risks. She also implied that there was a conflict of interests due to the company’s previous involvement in cryptocurrency.
Related: Yellen questions crypto’s role in 401(k), but says Congress could regulate
Tommy Tuberville, a Republican Senator, introduced the Financial Freedom bill in May to stop the DOL intervening in the inclusion of cryptocurrency by plan providers. ForUsAll, a 401(k), provider, sued the DOL in June to have the March Compliance Assistance Release annulled. They cited the Administrative Procedure Act.
Jeff Schulte, CEO of ForUsAll, stated in a statement Tuesday regarding Walsh’s testimony that “While we’re encouraged to see the Department of Labor consider following the proper rulemaking procedure for a change,” […] The DOL does not have the authority to choose winners or losers by trying to ban entire asset types.