Is crypto allowed in a 401(k)? The DOL rules, dated

The department's stance has moved from cautious to neutral across three steps, with a fourth one still incomplete.

On March 10, 2022, plans received a guidance note telling those in charge to act with "extreme care" before adding crypto to a 401(k) menu, which the 2022 release documents. The guidance asked the people choosing plan investments to use extra caution before adding crypto.

A new notice issued on May 28, 2025 took the place of the 2022 note. It explained that the "extreme care" standard appears nowhere in the federal law for workplace retirement plans, and that the department neither endorses nor disapproves of crypto.

On August 7, 2025, the President signed an executive order that names actively managed funds investing in crypto among the investments it says 401(k) savers should be able to reach. In plain words, these are crypto funds run by professional managers. The Labor Secretary was given 180 days to revisit the department's guidance.

On March 31, 2026, a proposed rule appeared in the Federal Register, the daily journal where the government publishes its rules. A rule at this stage is only a draft, so the department may still revise it, and by October 2026 no final version had come out.

The department stays neutral. It neither encourages plans to include crypto nor instructs them to exclude it.

Under the draft rule, the people running your plan would gain protection from blame provided they follow fixed steps when choosing investments for the menu. Those steps address six factors: performance, fees, how readily the holding converts to cash, how its value gets determined, how it compares with similar options, and how complex it is.

That protection applies only to choices on the plan's menu. A brokerage window, meaning an optional account some 401(k) plans offer that lets you buy funds outside the menu, is not covered by the draft.

The draft is not a final rule, and it does not require your plan to add or remove crypto.

The plan your employer sponsors has two routes for doing this, and plenty of plans take neither.

• A crypto window inside the plan that you direct yourself, choosing the coins on your own within whatever limits the plan sets.
• A brokerage window through which you can buy a spot crypto ETF, a fund holding actual coins that trades like a stock, meaning you own fund shares instead of coins.

When a plan offers neither route, adding crypto to that account is not something you can do by yourself. That decision rests with the plan rather than with you, so start by checking what your plan's menu and any brokerage window let you buy.

When a plan blocks crypto, some savers shift money into an IRA, a retirement account you set up on your own away from your job, with a company willing to hold coins. A rollover means moving money between accounts without cashing anything out.

Funds sitting in a former employer's plan may be rolled over whenever you like. Money in your current employer's plan can only move through an in-service rollover, which means moving it while you still work there, and only if your plan allows that.

With a direct rollover, the old plan sends payment straight to the new IRA company, so nothing gets withheld. Money that went in before income tax and moves into a traditional IRA, the usual kind where tax waits until you take money out, owes no tax now. When the plan pays you directly instead, it holds back 20% toward federal tax, and you then have 60 days to put all the money into the IRA, including whatever was withheld.

Any money you fail to roll over becomes taxable income, and if you are under 59½ it can also trigger an extra 10% tax on the taxable portion, which the IRS rollover page lays out. Moving 401(k) money that has not been taxed yet into a Roth IRA, an IRA filled with money that has already been taxed, raises this year's federal tax bill.