Advances in blockchain distributed ledger technology have led to dramatic growth in the role of digital assets in finance. This has resulted in new applications and technological developments involving financial services and blockchain.
Read the full article at Financier Worldwide.
Kryptonite is a fictional substance that causes the mighty Superman to lose all his strength. According to a recent release from the U.S. Department of Labor Employee Benefits Security Administration (“DOL”), cryptocurrency might carry similar dangers for otherwise strong and healthy 401(k) plan accounts. That is, in DOL’s view, the benefits of cryptocurrency in 401(k) plans may prove to be just as fictional as kryptonite, thereby causing significant risks of losses for retirement security.
On March 10, 2022, DOL issued Compliance Assistance Release No. 2022-01 (the “Release”) to caution plan fiduciaries to exercise extreme care before considering whether to include investment options like cryptocurrency as part of a 401(k) plan’s investment menu. In so doing, DOL raised five key concerns associated with offering these types of investment options.
As cryptocurrencies surge in value and enter mainstream consciousness, an increasing number of employers may consider compensating their employees with bitcoin, ether, or other cryptocurrencies. While a cryptocurrency compensation scheme may proliferate everyday usage of these currencies and attract tech-savvy labor talent to organizations, it may also put an employer at risk of wage and hour violations, and implicate additional regulatory regimes such as the securities laws. Although lawsuits on such “crypto-compensation” issues have yet to materialize, employers should stay ahead of the curve by protecting themselves against these potential pitfalls:
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