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The US State Department of Labor has cautioned 401(k) investors against fraud, theft, and losses when dealing with cryptocurrencies and related virtual assets.
Source: US Department of Labor
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The department warns that a substantial amount of crypto investment in institutional-sponsored retirement accounts may be subject to a legal clearance.
The directive comes in response to a rising number of financial service providers who have been touting cryptocurrencies as an investment option in 401(k) schemes.
The Employee Retirement Income Security Act does not restrict the type of assets to be included in the scheme but does direct the fiduciaries to exercise a duty of care.
Employee Benefits Securities Administration assistant, Ali Khawar, says that the retirement and savings of the US workers should be protected against losses from volatile assets.
A 401(k) retirement savings scheme is a plan provided by American employers with a tax advantage and long-term financial security.
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