Senators Bernie Sanders and Elizabeth Warren are calling on the Trump administration’s Labor Division to scrap a rule that may open America’s retirement financial savings accounts to Bitcoin and different cryptocurrencies — a transfer the lawmakers say places employees’ monetary futures in danger whereas lining the pockets of President Trump and his household.
In a 14-page letter despatched Monday to Performing Labor Secretary Keith Sonderling, Sanders (I-VT) and Warren (D-MA) joined Home Training and Workforce Committee rating member Rep. Bobby Scott (D-VA) to sentence a proposed Division of Labor rule floated in March.
The rule would give 401(okay) plan fiduciaries cowl to supply risky property — together with cryptocurrency, personal fairness, and personal credit score — as long as fiduciaries can reveal they weighed related components earlier than providing entry.
“The proposed rule is dangerous to American employees and counter to statute, Congressional intent, current rules, and case regulation,” the letter reads.
What the rule would do
The proposal stems from an govt order President Trump signed final August, directing the Labor Division to revisit its method to various property in retirement plans. Beneath present regulation, fiduciaries managing 401(okay) plans are held to a strict “prudence” commonplace — a requirement rooted within the Worker Retirement Earnings Safety Act (ERISA) of 1974 and bolstered by Supreme Courtroom precedent.
The Democrats argue the brand new rule would flip that commonplace on its head. Reasonably than requiring fiduciaries to reveal due diligence, the rule would presume it — as long as a fiduciary follows the method the rule outlines.
That shift, the lawmakers say, conflicts with a long time of authorized precedent and exposes the estimated $14.2 trillion sitting in American 401(okay) accounts to property with excessive worth swings and restricted regulatory oversight.
The Monetary Business Regulatory Authority (FINRA) has warned that crypto investments “have skilled larger ranges of volatility relative to extra conventional funding property” and that “the chance of shedding your whole funding is important.” The FBI reported over $11 billion in cryptocurrency fraud losses in 2025 — among the many highest losses from any class of cyber-enabled crime.
The Trump conflict-of-interest argument
The Democratic lawmakers went past retirement coverage, elevating pointed conflict-of-interest issues. Trump’s grownup sons handle the household’s crypto enterprise, and the ventures have raised an estimated $5 billion for the Trump household following the September launch of their digital forex, in accordance to the Wall Road Journal.
The household’s crypto portfolio consists of World Liberty Monetary’s WLFI and USD1 tokens, in addition to the official Trump meme coin — which surged previous $75 per token at Trump’s January 2025 inauguration earlier than collapsing to round $2.
“The change to the prudence commonplace described above expands alternatives for President Trump and his household to revenue on the expense of taxpayers, employees, and retirees,” the letter reads.
Shopper advocacy group People for Monetary Reform echoed these issues.
“Opening 401(okay)s to those merchandise dangers turning employees’ retirement financial savings right into a Ponzi-like scheme that throws a lifeline to an business scrambling for contemporary money,” mentioned Oscar Valdés Viera, a senior coverage analyst on the group.
The letter additionally cited senior poverty statistics: greater than 22.8% of seniors in the USA reside in poverty, in contrast with 5.1% in Denmark, 5.8% in France, and 12.6% in Germany — underscoring the stakes for retirees who can’t take up main losses.
The administration’s protection
The Trump administration has framed the rule as an growth of employee selection.
“The division’s days of choosing winners and losers are over,” Performing Labor Secretary Sonderling mentioned in an announcement. “Our rule clearly spells out that managers should consider any and all potential product choices by following a prudent course of.”
Treasury Secretary Scott Bessent added his assist, calling the rule “one other step in ushering in President Trump’s ‘Golden Age.’”