Senators Bernie Sanders and Elizabeth Warren are calling on the Trump administration’s Labor Department to scrap a rule that would open America’s retirement savings accounts to Bitcoin and other cryptocurrencies — a move the lawmakers say puts workers’ financial futures at risk while lining the pockets of President Trump and his family.
In a 14-page letter sent Monday to Acting Labor Secretary Keith Sonderling, Sanders (I-VT) and Warren (D-MA) joined House Education and Workforce Committee ranking member Rep. Bobby Scott (D-VA) to condemn a proposed Department of Labor rule floated in March.
The rule would give 401(k) plan fiduciaries cover to offer volatile assets — including cryptocurrency, private equity, and private credit — so long as fiduciaries can demonstrate they weighed relevant factors before offering access.
“The proposed rule is harmful to American workers and counter to statute, Congressional intent, existing regulations, and case law,” the letter reads.
What the rule would do
The proposal stems from an executive order President Trump signed last August, directing the Labor Department to revisit its approach to alternative assets in retirement plans. Under current law, fiduciaries managing 401(k) plans are held to a strict “prudence” standard — a requirement rooted in the Employee Retirement Income Security Act (ERISA) of 1974 and reinforced by Supreme Court precedent.
The Democrats argue the new rule would flip that standard on its head. Rather than requiring fiduciaries to demonstrate due diligence, the rule would presume it — so long as a fiduciary follows the process the rule outlines.
That shift, the lawmakers say, conflicts with decades of legal precedent and exposes the estimated $14.2 trillion sitting in American 401(k) accounts to assets with extreme price swings and limited regulatory oversight.
The Financial Industry Regulatory Authority (FINRA) has warned that crypto investments “have experienced higher levels of volatility relative to more traditional investment assets” and that “the risk of losing all of your investment is significant.” The FBI reported over $11 billion in cryptocurrency fraud losses in 2025 — among the highest losses from any category of cyber-enabled crime.
The Trump conflict-of-interest argument
The Democratic lawmakers went beyond retirement policy, raising pointed conflict-of-interest concerns. Trump’s adult sons manage the family’s crypto business, and the ventures have raised an estimated $5 billion for the Trump family following the September launch of their digital currency, according to the Wall Street Journal.
The family’s crypto portfolio includes World Liberty Financial’s WLFI and USD1 tokens, as well as the official Trump meme coin — which surged past $75 per token at Trump’s January 2025 inauguration before collapsing to around $2.
“The change to the prudence standard described above expands opportunities for President Trump and his family to profit at the expense of taxpayers, workers, and retirees,” the letter reads.
Consumer advocacy group Americans for Financial Reform echoed those concerns.
“Opening 401(k)s to these products risks turning workers’ retirement savings into a Ponzi-like scheme that throws a lifeline to an industry scrambling for fresh cash,” said Oscar Valdés Viera, a senior policy analyst at the organization.
The letter also cited senior poverty statistics: more than 22.8% of seniors in the United States live in poverty, compared with 5.1% in Denmark, 5.8% in France, and 12.6% in Germany — underscoring the stakes for retirees who can’t absorb major losses.
The administration’s 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,” Acting Labor Secretary Sonderling 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 added his support, calling the rule “another step in ushering in President Trump’s ‘Golden Age.’”
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