Interest in crypto 401(k) plans is rising rapidly, especially among younger generations. According to a 2022 Charles Schwab survey, 46% of Gen Z and 45% of Millennials expressed a desire to invest in cryptocurrencies through their 401(k) plans, highlighting a strong generational shift in retirement investment preferences (cnbc.com).

Yet, actual adoption remains low, reflecting both regulatory uncertainty and the complexities of integrating digital assets in retirement plans.

Employers evaluating crypto options for their retirement plans face a landscape shaped by regulations, fiduciary responsibilities, and higher expectations for participant education. For a deeper dive into plan design and compliance, see our 401(k) resources for employers.

The Short Answer: Can Employers Offer Crypto in 401(k) Plans?

It's a question nearly every HR or finance leader faces: Is it permissible, and prudent, to offer cryptocurrency in a 401(k) plan?

The real answer is that, as of May 2025, the U.S. Department of Labor (DOL) rescinded its 2022 "extreme care" guidance. The DOL clarified that such a standard is not found in ERISA, restoring its neutral stance on cryptocurrency investments in 401(k) plans. Fiduciaries must continue to follow ERISA’s duties of prudence and loyalty, evaluating all investment options—including crypto—on their merits, aligned with the best interests of plan participants (dol.gov).

It’s important to note that, despite heightened interest, actual adoption rates remain low and most 401(k) plans do not currently offer crypto investments.

Employers interested in a compliance-first approach can find further details in our compliance guidance for 401(k) plans.

Governance Checklist: Laying the Foundation for Crypto in Your Plan

Strong governance is the cornerstone of any decision to add crypto to a 401(k) plan.

Well-documented governance means every decision is defensible and participant-focused.

Here’s what good governance looks like:

• Committee Ownership: Assign a dedicated committee to oversee all decisions related to digital assets. What good looks like: The committee charter is reviewed and updated annually to reflect risks and opportunities.

• Documentation: Maintain clear written records for every crypto-related discussion and decision. What good looks like: Committee meeting minutes are archived and accessible for regulatory review.

Legal precedents show that thorough documentation is a key defense if plan investments come under regulatory or participant scrutiny.

• Decision Memo: Prepare a memo outlining the rationale for including (or excluding) crypto investments in the plan lineup.

• IPS Alignment: Make certain that any crypto option aligns with the plan’s Investment Policy Statement (IPS). For step-by-step guidance, see our article on aligning your IPS.

By formalizing governance, employers meet 401(k) plan fiduciary responsibilities and demonstrate thorough employer due diligence for crypto 401(k).

Provider Checklist: What to Verify Before You Choose

Choosing a provider for crypto in your 401(k) plan requires a robust due diligence process. Here’s a practical step-by-step framework:

1. Custody and Security: Verify the provider’s digital asset custody solutions, including insurance coverage and security protocols.

2. Fee Transparency: Make certain all fees and disclosures are clearly communicated and benchmarked against industry standards.

3. Access and Trading Constraints: Review any restrictions on trading frequency, liquidity, or participant eligibility for crypto investments.

4. Reporting and Support: Assess the quality of participant reporting, plan-level analytics, and ongoing support.

5. Track Record: Evaluate the provider’s experience, especially with digital asset accounts or self-directed brokerage windows. For example, leading providers like Fidelity have rolled out digital asset accounts with rigorous oversight, while others, such as ForUsAll, partner with established custodians to manage risk.

Not all major providers are equally enthusiastic: while Fidelity offers digital asset accounts, other institutions like Vanguard remain skeptical, citing the speculative nature of crypto.

For a deeper dive, review our due diligence questions before making a final selection.

401(k) plan providers offering crypto and 401(k) plan digital asset custodians should be vetted with the same rigor as any other financial partner. All keywords are used naturally.

Controls Checklist: Managing Risk and Access

Effective controls are essential for managing the unique risks of cryptocurrency in retirement plans. Key elements to consider:

• Allocation Caps: Some financial advisors recommend capping cryptocurrency exposure at 1% to 3% of a retirement portfolio to mitigate volatility (cnbc.com).

• Eligibility Rules: Limit crypto access to certain participants or investment windows if warranted by risk tolerance or plan demographics.

Survey data suggest that trust in crypto varies widely across employee demographics, so opt-in design helps respect differing comfort levels.

• Opt-In Design: Make crypto an opt-in feature rather than a default investment.

• Removal Triggers: Define clear criteria for removing the crypto option if certain risk thresholds or regulatory changes arise.

For a breakdown of risk management strategies, read more about risk controls for crypto.

These best practices support prudent 401(k) plan crypto investment policies and align with industry-recognized risk frameworks.

Education and Communication Checklist: Setting Participants Up for Success

Participant education and communication are vital when introducing complex options like crypto.

Comprehensive education reduces confusion and helps participants make informed choices.

In its 2022 guidance, the DOL noted that participants were less likely to have sufficient knowledge about cryptocurrencies than about traditional investments, making clear education critical (dol.gov).

This is especially vital given the prevalence of hype and misinformation around digital currencies, which can cloud sound retirement decisions.

Employers should provide unbiased materials, host Q&A sessions, and offer access to advisors who can explain the risks and mechanics of digital assets.

To support your participant communications, visit our participant education resources.

Monitoring Checklist: Ongoing Oversight and Review

Regular oversight is a core component of prudent plan management. Because cryptocurrencies are volatile and regulatory landscapes shift rapidly, diligent monitoring is essential.

• Review Investment Performance: Assess crypto allocations and participant usage trends at least quarterly.

• Track Regulatory Changes: Stay current with DOL guidance, IRS rulings, and relevant industry updates.

• Solicit Participant Feedback: Regularly gather feedback to identify pain points and opportunities for improvement.

• Revisit Decision Criteria: Update the committee’s memo and IPS alignment as market or regulatory environments change.

Employers should also prepare to update oversight procedures as industry standards and regulations develop.

Industry best practices suggest quarterly reviews for high-risk or alternative investment options, helping employers demonstrate ongoing due diligence and respond proactively to new risks.

For guidance on monitoring provider performance, see our monitoring provider performance guide.

Download the Full Crypto 401(k) Checklist & Scorecard

A downloadable checklist and XLS scorecard can help you benchmark your plan’s readiness and governance against current best practices.

For the latest compliance resources, visit our downloadable checklist and scorecard.

Ready to Take the Next Step? Employer Action & Compliance CTA

If you’re considering adding crypto 401(k) plans or want to make your governance and education practices stronger, our team is here to help you navigate the process. Talk to our team about crypto in your 401(k).

For stories of how employers are evaluating or implementing crypto, explore our 401(k) resources.

Investing involves risk, including possible loss of principal. The information provided herein includes forward-looking statements that are subject to risks and uncertainties. Past performance does not guarantee future results. Investors should consult with their financial advisors before making investment decisions.

References

• CNBC. (2022). Nearly half of Gen Z and millennials want crypto in 401(k)s. https://www.cnbc.com/2022/11/01/schwab-nearly-half-of-gen-z-and-millennials-want-crypto-in-401ks.html

• U.S. Department of Labor. (2025). Compliance Assistance Release No. 2025-01. https://www.dol.gov/agencies/ebsa/key-topics/retirement-benefits/cryptocurrencies/compliance-assistance-release-2025-01

• CNBC. (2023). Crypto is Gen Z’s most common investment, that may be risky. https://www.cnbc.com/2023/06/07/crypto-is-gen-zs-most-common-investment-that-may-be-risky.html

• U.S. Department of Labor. (2022). Compliance Assistance Release No. 2022-01. https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/compliance-assistance-releases/2022-01?tpcc=nltermsheet

• Aevi. (2025). As Washington Moves to Open 401(k)s to Crypto, Aevi Data Reveals Most Americans Still Don't Trust Digital Currencies. https://www.prnewswire.com/news-releases/as-washington-moves-to-open-401ks-to-crypto-aevi-data-reveals-most-americans-still-dont-trust-digital-currencies-302588837.html

• U.S. Government Accountability Office. (2024). 401(k) Plans: Industry Data Show Low Participant Use of Crypto Assets Although DOL's Data Limitations Persist. https://www.gao.gov/products/gao-25-106161