The government is "clearly trying to effect a ban and they don’t have the legal authority to do so,” the CEO of ForUsAll implied.
On June 2, California-based 401(k) retirement provider ForUsAll filed a lawsuit against the United States Department of Labor (DOL) and US Secretary of Labor Martin Walsh in the US District Court in Washington. The official complaint dictates that DOL violated the Administrative Procedure Act (APA) by providing guidance without following the protocol.
According to ForUsAll, those procedures would have necessitated a long notice and comment period. DOL supposedly didn't carry out such a step due to the impact that the ongoing Superbowl commercials that persuaded traders to invest their retirement money into cryptocurrencies might have had. Thus, the agency argues that this was the reason why the verdict was rushed and why the DOL announced the guidance ahead of time.
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The news comes after DOL previously warned 401(k) plans to consider the addition of cryptocurrencies to a retirement plan’s investment menu with caution. However, ForUsAll wasn’t happy with such a controversial warning and decided to sue the agency on June 2.
As stated by the lawsuit, ForUsAll proposes that DOL’s crypto guidance should be postponed as the company has suffered damages from such recommendations.
According to the DOL announcement, the Employee Benefits Security Administration (EBSA) would launch an investigation campaign targeting 401(k) plans that include crypto. Jeff Schulte, ForUsAll CEO, added:
“The government is suddenly trying to restrict the type of investments Americans can choose to make because they’ve decided today that they don’t like a certain asset class. […] They’re clearly trying to effect a ban and they don’t have the legal authority to do so.”
Schulte also stated that even though DOL serves a number of critical functions for Americans, "armchair financial adviser shouldn’t be one of them." According to the CEO, congress didn't provide the government the ability to choose who wins or who loses, much less the authority to unilaterally limit whole asset classes. "And it certainly never authorized agencies to take such sweeping and abrupt action with no public process,” Schulte concluded.
