- US Labor Department advised extreme caution in offering crypto as a retirement investment
- ForUsAll sued them for issuing illegal guidance, driving customers away from their crypto offerings
A US federal court judge dismissed a case filed by an investment consultant against the US Department of Labor on August 29, confirming the latter’s warning that cryptocurrency might not be a smart retirement investment, Reuters reported.
Warning drove clients away
Last year, the consultancy firm ForUsAll sued the Labor Department for allegedly issuing illegal guidance that drove customers away from its cryptocurrency products. The case was dismissed by US District Judge Christopher Cooper in Washington, D.C.
The judge said the Labor Department’s view of crypto-related risk would not change even if he overturned the guidance.
Crypto is a poor retirement investment?
According to ForUsAll, who are based in San Francisco, the government agency unlawfully skipped the lawmaking process when advising retirement planners to exercise extreme caution. It did so in the context of adding crypto to retirement plan offerings. The US Labor Department is responsible for enforcing retirement plan rules.
Judge Cooper rejected the company’s claim, saying the guidance was not a final legal measure that one could challenge under the law.
The US Labor Department gave this guidance in March last year, after US President Joe Biden signed an executive order mandating the government to evaluate the pluses and risks of cryptocurrency.
According to the Labor Department, reasonable retirement plan administrators probably wouldn’t offer digital assets as an investment. They added they would “question those who do.”
Labor Department acted arbitrarily
In its lawsuit, ForUsAll said the agency acted in an arbitrary manner in claiming only cryptocurrencies should be approached with "extreme caution." This position was rejected by the judge on Tuesday. He said, as quoted by Reuters:
It is hard to fathom how the supposed extreme care standard deviates from the ordinary duty of prudence that is the highest known to the law.
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