Senators Bernie Sanders and Elizabeth Warren have urged the Trump administration’s Labor Department to withdraw a proposal that would permit retirement savings accounts to include Bitcoin and other digital assets, citing concerns that such a move could jeopardize workers’ financial security and benefit the president and his family.
In a 14‑page letter submitted Monday to Acting Labor Secretary Keith Sonderington, Sanders, Warren, and House Education and Workforce Committee ranking member Representative Bobby Scott condemned a Department of Labor rule proposed in March.
The proposal would enable 401(k) fiduciaries to offer volatile assets — such as cryptocurrency, private equity, and private credit — provided they can show that they have considered relevant factors before making them available.
The letter states that the proposed rule is detrimental to American workers and inconsistent with existing statutes, congressional intent, regulations, and precedent.
What the rule would do
The proposal originates from an executive order signed by President Trump in August, instructing the Labor Department to re‑examine its handling of alternative investments within retirement plans. Currently, 401(k) fiduciaries must adhere to a strict prudence standard established by the Employee Retirement Income Security Act of 1974 and upheld by Supreme Court decisions.
Democrats contend that the new rule inverts this standard. Instead of requiring fiduciaries to prove due diligence, the rule would assume compliance as long as they follow the outlined process.
According to the lawmakers, this shift conflicts with decades of legal precedent and would expose an estimated $14.2 trillion in U.S. 401(k) assets to highly volatile investments with limited regulatory oversight.
The Financial Industry Regulatory Authority (FINRA) has cautioned that crypto investments “exhibit greater volatility than traditional assets” and that “the risk of losing the entire investment is significant.” The FBI reported more than $11 billion in cryptocurrency‑related fraud losses in 2025, marking one of the largest categories of cyber‑enabled crime losses.
The Trump conflict-of-interest argument
Beyond retirement policy, the legislators highlighted conflict‑of‑interest concerns, noting that President Trump’s adult sons oversee the family’s crypto ventures, which have generated an estimated $5 billion for the Trump family since the September launch of their digital currency, as reported by the Wall Street Journal.
The family’s crypto portfolio includes tokens such as WLFI and USD1 from World Liberty Financial, as well as the official Trump meme coin, which peaked above $75 per token during Trump’s January 2025 inauguration before falling to approximately $2.
The letter asserts that altering the prudence standard “expands opportunities for President Trump and his family to profit at the expense of taxpayers, workers, and retirees.”
Consumer advocacy group Americans for Financial Reform voiced similar concerns, stating that “opening 401(k)s to these products risks turning workers’ retirement savings into a Ponzi‑like scheme that provides a lifeline to an industry seeking fresh cash,” said Oscar Valdés Viera, senior policy analyst at the organization.
The letter also referenced senior poverty statistics, noting that over 22.8 % of U.S. seniors live in poverty — compared with 5.1 % in Denmark, 5.8 % in France, and 12.6 % in Germany — underscoring the importance of protecting retirees who cannot withstand significant losses.
The administration’s defense
The Trump administration has characterized the rule as an expansion of worker choice.
“The department’s days of picking winners and losers are over,” Acting Labor Secretary Keith Sonderington said in a statement. “Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process.”
Treasury Secretary Scott Bessent voiced support, describing the rule as “another step in ushering in President Trump’s ‘Golden Age.’”