Democratic Lawmakers Challenge Department of Labor’s Crypto 401(k) Rule

President Donald Trump’s August 2025 executive order directed the Labor Department to broaden retirement-plan options. On March 30, 2026 the department proposed a safe-harbor rule letting 401(k) fiduciaries offer cryptocurrencies, private-equity, private-credit and real-estate assets, presuming prudence if certain factors are reviewed. Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA), with Rep. Bobby Scott (D-VA), sent a 14-page letter on June 1 urging withdrawal, saying the rule overturns ERISA’s prudence standard and removes long-standing investor protections.

Sanders and Warren Urge Labor Department to Scrap Proposed Crypto 401(k) Rule as Comment Period Closes

The rule could expose $14.2 trillion in retirement savings—though the Investment Company Institute reports $10.1 trillion in 401(k) assets—to volatile investments. Lawmakers cite Trump’s $TRUMP meme coin, which fell from a $73 peak in Jan 2025 to about $2, and FBI data showing $11 billion in crypto-fraud losses in 2025 (other estimates $20 billion). They note that 22.8 % of U.S. seniors live in poverty. The Trump family’s crypto ventures, including World Liberty Financial’s WLFI token and USD1 stablecoin, have generated up to $5 billion in wealth.

The Guardian

Acting Labor Secretary Keith Sonderling said the department’s “days of picking winners and losers are over” and that the rule “clearly spells out that managers must evaluate product offerings by following a prudent process.” Treasury Secretary Scott Bessent called it “another step in ushering in President Trump’s ‘Golden Age.’” The DOL confirmed receipt of the letter and is reviewing the comments.

The GuardianDemocrats Sanders and Warren Push Labor Department to Abandon Bitcoin 401(k) RuleSanders and Warren Urge Labor Department to Scrap Proposed Crypto 401(k) Rule as Comment Period Closes

Americans for Financial Reform’s senior analyst Oscar Valdés Viera warned that opening 401(k)s to crypto “risks turning workers’ retirement savings into a Ponzi-like scheme.” Better Markets’ director Benjamin Schiffrin called the approach “the wrong approach at the wrong time.”

Common Dreams

Discrepancies exist between the DOL’s $14.2 trillion exposure estimate and the Investment Company Institute’s $10.1 trillion figure for 401(k) assets, and between FBI-reported $11 billion crypto-fraud losses in 2025 and other $20 billion estimates. The 60-day comment period closed June 1; the DOL will review the input and may revise, rescind, or advance the rule, with lawmakers prepared to sue if it proceeds.

Benzinga

“The proposed rule is harmful to American workers and counter to statute, Congressional intent, existing regulations, and case law,” — Bernie Sanders, Senator

Democrats Sanders and Warren Push Labor Department to Abandon Bitcoin 401(k) Rule

“This would strip long-held investor protections from retirement savers and encourage the use of more risky, complex, and expensive investments,” — Elizabeth Warren, Senator

The Guardian

“The department’s days of picking winners and losers are over.” — Keith Sonderling, Acting Labor Secretary

The Guardian

“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,” — Oscar Valdés Viera, Senior Policy Analyst, Americans for Financial Reform

Democrats Sanders and Warren Push Labor Department to Abandon Bitcoin 401(k) Rule