Senators Bernie Sanders (D-VT) and Elizabeth Warren (D-Mass.) sent a letter Sunday pushing the Department of Labor to kill a proposed rule that would open 401(k) retirement plans to cryptocurrencies and other alternative assets.
Rule Would Strip Long-Held Investor Protections, Lawmakers Say
The rule originated from a Trump executive order directing the Labor Department to pave the way for alternative assets in retirement plans.
The March proposal outlines steps 401(k) managers should take when incorporating private equity, real estate, and digital assets, creating a safe harbor for fiduciaries who offer those options.
Sanders, Warren, and House Education Committee ranking member Rep. Robert Scott argue that safe harbor removes protections retirement savers have relied on for decades.
“This would strip long-held investor protections from retirement savers and encourage the use of more risky, complex, and expensive investments,” they wrote to Acting Labor Secretary Keith Sonderling.
To support their case, the lawmakers pointed to Trump’s own meme coin, which hit an all-time high above $73 but now trades near $2, as a direct example of crypto volatility.
They also cited an FBI report showing crypto-linked fraud losses hit a record $11 billion in 2025, with seniors hit hardest.
Trump Family Made $5B From Crypto While Pushing These Policies
Beyond the volatility argument, the letter goes after what the lawmakers call a direct conflict of interest.
The Wall Street Journal reported in 2025 that the Trump family amassed roughly $5 billion in paper wealth following the launch of the World Liberty Financial (CRYPTO: WLFI) token, the same administration now pushing retirement savers toward digital assets.
“In the midst of these egregious conflicts, the DOL’s proposed rule has the potential to boost the President’s bottom line at the expense of ordinary workers and retirees,” they wrote.
“How can the American people trust regulations proposed by an Administration that conceivably stands to profit from them?” they added.
Why This Matters For Crypto Markets Right Now
The proposed rule represents one of the largest potential capital inflows into crypto ever considered by US policy, with 401(k) plans collectively holding over $7 trillion in assets.
However, Democratic opposition adds another political headwind at a moment when the CLARITY Act is already navigating a narrow nine-week window before the August recess.
If the conflict of interest narrative gains traction in Washington, it complicates the broader legislative push at the worst possible time.
Image: Shutterstock
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