Executive Order Opens Crypto for 401(k) Investors
On August 7, 2025, the White House issued a long-awaited executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors.” For the first time, U.S. retirement savers will be permitted to allocate a portion of their 401(k) accounts to certain alternative investments—including private equity, real estate, and digital assets such as cryptocurrencies.
The following opinion editorial was written by Alex Forehand and Michael Handelsman for Kelman.Law.
The change is not minor. By allowing these products into defined-contribution retirement plans, the federal government has effectively opened a new gateway for more than 90 million Americans to gain exposure to crypto through their employer-sponsored savings.
A Historic Expansion of Retirement Investment Options
Until now, most 401(k) plans have been restricted to traditional investments like publicly traded stocks, bonds, and mutual funds. While these remain core portfolio components, the new policy reflects a recognition that alternative assets—once accessible primarily to institutions and high-net-worth individuals—can offer diversification and growth potential for everyday investors.
Opening the nearly $9 trillion 401(k) market to crypto could prove transformative, both for individual portfolios and for the broader blockchain economy. The order also directs the Department of Labor, Treasury, and SEC to develop clear guidance so that plan sponsors can confidently offer these products while meeting their fiduciary duties.
Key Regulatory Actions in the Executive Order
The executive order lays out a series of specific regulatory steps, most of which must be taken within 180 days:
Reexamination of ERISA Guidance
The Secretary of Labor must review past and current Department of Labor (DOL) guidance on fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) as it relates to asset allocation funds that include alternative assets. This review will consider whether to rescind the DOL’s December 21, 2021 Supplemental Private Equity Statement, which imposed cautionary limits on such investments.
Clarification of Fiduciary Standards
The Secretary is tasked with clarifying DOL’s position on alternative assets and the appropriate fiduciary process for offering them under ERISA. This will include:
- Establishing criteria for how fiduciaries should weigh potentially higher fees against the goals of higher long-term returns and portfolio diversification.
- Proposing rules, regulations, or guidance—possibly including safe harbors—to reduce uncertainty over fiduciary duties when making these investment options available.
- Prioritizing measures to reduce ERISA litigation risk, thereby allowing fiduciaries greater freedom to exercise business judgment without fear of excessive lawsuits.
Interagency Coordination and SEC Involvement
The DOL will consult with the Treasury Department, SEC, and other regulators to ensure consistent rules and to explore parallel regulatory changes.
The SEC, working with the DOL, will consider ways to expand access to alternative assets in participant-directed retirement plans. This could involve revisiting accredited investor and qualified purchaser definitions, potentially broadening eligibility to participate in private and digital asset offerings.
Balancing Opportunity and Risk
From a legal perspective, the inclusion of digital assets in retirement plans represents a major step toward institutional mainstreaming of cryptocurrency. With clearer fiduciary frameworks, plan sponsors will gain certainty in offering digital asset exposure without fear of enforcement risk.
While the policy opens the door to exciting possibilities, it also comes with heightened fiduciary responsibilities. Alternative assets, and crypto in particular, can involve higher volatility, lower liquidity, and complex valuation issues. Plan sponsors will need to adopt rigorous due diligence processes, implement allocation limits, and provide robust disclosures to participants.
This balancing act will be critical: allowing innovation while protecting investors and meeting ERISA obligations.
Our Take
At Kelman PLLC, we view this executive order as a turning point in both retirement investing and digital asset regulation. For plan sponsors, asset managers, and fintech providers, now is the time to prepare. That means developing compliant product offerings, designing participant education programs, and staying ahead of evolving regulatory guidance.
With 90 million Americans now potentially gaining crypto exposure through their retirement accounts, the intersection of digital assets and long-term savings just became one of the most important frontiers in financial law.
Kelman PLLC continues to monitor developments in crypto regulation across jurisdictions and is available to advise clients navigating these evolving legal landscapes. For more information or to schedule a consultation, please contact us.
This article originally appeared at Kelman.law.
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