November 28, 2022

NYAG Calls for Legislation to Prohibit IRA and Plan Investment in Digital Assets

New York Attorney General Leticia James urged Congress to pass legislation that would prohibit Individual Retirement Accounts ("IRAs") and other defined contribution retirement plans from investing in digital assets.

In a letter to the leadership of the Senate Committee on Finance and House Committee on Ways and Means, Ms. James criticized the proposed Retirement Savings Modernization Act and Financial Freedom Act of 2022, each of which would allow 401(k) plans to invest in digital assets. She argued that because digital assets have no intrinsic value, they are "too unstable to be a suitable asset for retirement savings."

Ms. James warned that the unregulated nature of digital assets makes the markets equally susceptible to price volatility and crime. She said that issuers of digital assets do not offer the same protections that issuers of traditional securities offer. She noted that the DOL also warned against retirement accounts investing in digital assets.

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