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US Labor Department Sued For Unlawful Crypto Guidance, Lawsuit Claims

Numerous sectors, firms, and companies in the United States of America are moving towards utilizing cryptocurrencies. In the heat of the crypto industry’s growth, the US Labor Department gave forth the Compliance Assistance Release No. 2022-01. However, the department and the Secretary of Labor, Marin J. Walsh, have been sued.  

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The lawsuit is targeted at the Labor Department accusing it of breaching its statutory legal scope of influence as the department threatened an investigative program towards plan sponsors offering digital assets.  

The court document reveals that the primary motive for the lawsuit is to preserve the rights of American investors. The document further states that it is the investors’ money, and they have the freedom to choose what they want to do with it after retirement.  

The guidance from the Labor Department was titled “401(k) Plan Investments In ‘Cryptocurrencies.’” The plaintiff in the case is Forusall Inc. which claims to be the first company in the USA to make cryptocurrency available to the 401(k) plan participants. The company provides administrative and various other services like business startups after retirement. 

The plaintiff in the complaint stated that the Department of Labor’s Release is entirely capricious, arbitrary, and above all, not according to the law. It further stated that the Release is in excess of the statutory jurisdiction of the Department of Labor and is unlawful. The complaint requests the court to countermand the Release. 

Forusall Inc. is not the only firm to allow bitcoin investments in 401(k) accounts. Fidelity Investments Inc. recently announced allowing bitcoin investments in 401(k) accounts. However, the firm’s decision raised many questions, and the Labor Department report said that it has grave concerns with the decision of Fidelity.  

Senator Elizabeth Warren sent a letter to the CEO of Fidelity Investments. In that letter, she raised numerous objections to the firm’s decision to allow bitcoin investments in 401(k) plans. 

However, while some criticize the companies, numerous lawmakers are concerned about the DOL’s actions to prevent the Americans from investing in bitcoin and other digital assets for retirement. US Senator Tommy Tuberville introduces the Financial Freedom Act. He described the Act as legislation prohibiting the Department of Labor from issuing any guidance or regulation that restrains the choice to freely invest in whatever legal asset the investors want to invest in for retirement.