ForUsAll advertises itself as the first 401(k) platform to provide access to cryptocurrency. In the suit, the company indicates that the DOL's guidance dampened demand from retirement plans to add cryptocurrency as an option, according to Fisher Phillips. The company's suit alleges that the DOL circumvented the Administrative Procedure Act's (APA) rulemaking process by rushing out its guidance in response to several Super Bowl commercials promoting crypto, worried that the attention would lead to employees putting their retirement savings in crypto. According to the suit, the guidance was issued without the APA's required notice and comment procedures, which could have taken months – maybe even years, according to Fisher Phillips.

Jeff Schulte, the company's CEO, told Bloomberg Law that DOL's guidance broke with precedent that had "let plan sponsors off the hook for monitoring investments participants choose themselves." The DOL's guidance made it an "armchair financial advisor" that was effectively prohibiting the inclusion of an asset class in 401(k) plans, he said.

"When the federal government says that they're starting an investigatory program, and that any small business owner that decides to make cryptocurrency available — even through a self-directed brokerage account — should expect to be questioned, they're attempting to effect a ban," Schulte said.

Schulte said the DOL's guidance had limited investors from deciding how to best invest for retirement.

"We think it's extremely important that everyday Americans have the freedom to choose how they see best, and the self-directed brokerage account has been, for decades, a trusted tool for doing just that," he said. "The Department of Labor's overreach we think sets a troubling precedent, just because they don't like cryptocurrency."

In May, Ali Khawar, DOL Acting Assistant Secretary and Principal Deputy Assistant Secretary for EBSA, told Bloomberg Law that the agency's guidance did not represent a ban nor was it an attempt to create "a backdoor way to regulate brokerage windows in a whole new way." Khawar said the guidance serves to highlight cryptocurrency investments' volatility and the difficulty of determining their value in the market.

ForUsAll, Fidelity Investments and assorted trade organizations representing plan sponsors and retirement funds have made public calls to the Labor Department to revoke its guidance. Soon after the DOL issued its guidance in March, Fidelity released a crypto product for 401(k) investors.

In addition, Fisher Phillips noted, Sen. Tommy Tuberville (R-AL) introduced the proposed Financial Freedom Act on May 5 that would prohibit the DOL from limiting the types of investments that workers can invest in through their self-directed brokerage accounts, including 401(k)s.

In its post, Fisher Phillips advised that employers weighing digital assets for their 401(k) investment menu should consider EBSA's scrutiny for now. To include a cryptocurrency in their menu, they will want to have a "robust" monitoring process and prepare for a potential EBSA audit.

"While several financial experts expect that crypto may eventually have a place in 401(k) offerings, the time period for this adoption, and the parameters for such inclusion, remain to be seen," according to the post.