The U.S. Department of Labor identifies “significant risks” and challenges that cryptocurrencies like bitcoin, and non-fungible tokens present to 401k investors. These include fraud and theft, as well as financial loss. said Thursday.

According to the labor agency, employers who add crypto investments into their company’s 401(k), plans could easily be in breach of their legal obligations towards plan participants.

This advice comes at a time when financial service firms have started marketing these investments as options for retirement plans in the last months. growing popularityThe bureau stated that it was.

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Ali Khawar (acting assistant secretary, Employee Benefits Security Agency) stated that “At this stage in history of cryptocurrency… The U.S. Department of Labor is serious concern about plans to expose participants to investments in crypto currencies or related products such NFTs and coins.” wrote Thursday.

Employers that offer a plan with 401(k), have a fiduciary responsibility for the investment choices they make. They are required to make wise investments and maintain an eye on them.

This duty is at the heart of many 401k lawsuits over the past decade. These cases allege that workers have lost money because of excessive expenses and unwise fund selections.

In a Thursday compliance memo, the Labor Department addressed several issues and risks related to crypto in 401 (k) plans.

According to the bureau, crypto is volatile, speculative and difficult to value. Investors may find it challenging to make informed investments decisions. Other properties — like losing the asset forever in the event of forgetting a password — also pose hazards, the agency said.

The Labor Department stated that regulation could also be subject to rapid change. On Wednesday, President Joe Biden issued an executive orderCalling on the government for an examination of crypto’s benefits and risks. Many crypto supporters viewed it positively.

Matt Hougan is chief investment officer of Bitwise Asset Management. told CNBC. “It is pretty close to the result we had hoped for.”