Senators Bernie Sanders and Elizabeth Warren are calling on the Trump administration’s Labor Department to rescind a rule that would open American retirement savings accounts to bitcoin and other cryptocurrencies — a move lawmakers say puts workers’ financial futures at risk while lining the pockets of President Trump and his family.
In 14 pages letter Sent Monday to Acting Labor Secretary Keith Sonderling, Sanders (I-VT) and Warren (D-MA) joined the ranking member of the House Education and Workforce Committee, Rep. Bobby Scott (D-VA) to condemn the DOL’s proposed rule. I posed In March.
The rule would give 401(k) plan fiduciaries cover to offer volatile assets — including cryptocurrencies, private equity and private credit — as long as the fiduciaries can prove they weighed the relevant factors before offering access.
“The proposed rule is harmful to American workers and is inconsistent with the law, congressional intent, existing regulations, and case law,” the letter said.
What will Al Qaeda do?
The proposal stems from an executive order signed by President Trump last August, directing the Department of Labor to do so Reconsider its approach To alternative assets in retirement plans. Under current law, fiduciaries who manage 401(k) plans are subject to a strict “prudence” standard — a requirement rooted in the Employee Retirement Income Security Act (ERISA) of 1974 and reinforced by Supreme Court precedent.
Democrats say the new rule would turn that standard on its head. Rather than requiring fiduciaries to demonstrate due diligence, the rule assumes that they do—as long as the fiduciary follows the process established by the rule.
Lawmakers say the shift flies in the face of decades of legal precedent and exposes an estimated $14.2 trillion in U.S. 401(k) accounts to assets with extreme price volatility and limited regulatory oversight.
The Financial Industry Regulatory Authority (FINRA) has warned that cryptocurrency investments “experience higher levels of volatility than traditional investment assets” and that “the risk of losing all of your investments is significant.” FBI I mentioned More than $11 billion in cryptocurrency fraud losses in 2025 – among the highest losses of any category of cybercrime.
Trump’s conflict of interest argument
Democratic lawmakers have gone beyond retirement policy, raising obvious conflict-of-interest concerns. Trump’s adult children run the family’s cryptocurrency business, and the projects raised an estimated $5 billion for the Trump family after launching their digital currency in September. According to For the Wall Street Journal.
The family’s cryptocurrency portfolio includes World Liberty Financial’s WLFI and USD1 tokens, as well as the official Trump meme coin — which rose to over $75 per token at Trump’s inauguration in January 2025 before collapsing to around $2.
“The change in prudence standard described above expands opportunities for President Trump and his family to profit at the expense of taxpayers, workers, and retirees,” the letter said.
The consumer advocacy group Americans for Financial Reform echoed these concerns.
“Opening a 401(k) to these products risks turning workers’ retirement savings into a Ponzi-like scheme that throws a lifeline to an industry desperate for new money.” He said Oscar Valdés Vieira, a senior policy analyst at the organisation.
The letter also cited poverty statistics for the elderly: More than 22.8% of seniors in the United States live in poverty, compared to 5.1% in Denmark, 5.8% in France, and 12.6% in Germany — underscoring the risks faced by retirees who cannot absorb large losses.
Management defense
The Trump administration has framed the rule as an expansion of worker choice.
“The Department’s days of picking winners and losers are over,” said Acting Labor Secretary Sonderling He said In a statement. “Our rule clearly states that managers must evaluate any and all potential product offerings by following a prudent process.”
Treasury Secretary Scott Besent added his support, calling the rule “another step toward ushering in a golden age for President Trump.”
