Senators Bernie Sanders and Elizabeth Warren sent a 14-page letter to Acting Labor Secretary Keith Sonderling on June 2, urging the Trump administration to withdraw a proposed rule that would permit Bitcoin and other cryptocurrencies in 401(k) retirement accounts.
The letter, co-signed by House Education and Workforce Committee ranking member Bobby Scott, argues the rule exposes workers’ retirement savings to extreme volatility and creates conflicts of interest benefiting President Trump and his family. “The proposed rule is harmful to American workers and counter to statute, Congressional intent, existing regulations, and case law,” Sanders and Warren wrote.
The rule stems from an executive order Trump signed in August 2024 directing the Labor Department to revisit alternative assets in retirement plans. The Department of Labor floated the proposal in March 2026. It would shift the standard for 401(k) fiduciaries from proving they met a strict “prudence” requirement to presuming due diligence if they follow an outlined process. That standard has been rooted in the Employee Retirement Income Security Act of 1974 and reinforced by Supreme Court precedent.
The $14.2 trillion in American 401(k) accounts would be at risk under the change, Democrats argue. The Financial Industry Regulatory Authority 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 $11 billion in cryptocurrency fraud losses in 2025.
Sanders and Warren flagged the personal financial stakes. Trump’s adult sons manage the family’s crypto business, which includes World Liberty Financial’s WLFI and USD1 tokens and the official Trump meme coin. That meme coin surged past $75 per token at Trump’s January 2025 inauguration, then collapsed to $2. The Trump family’s crypto ventures raised an estimated $5 billion following the September 2024 launch of their digital currency.
“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 senators wrote.
Treasury Secretary Scott Bessent framed the rule as “another step in ushering in President Trump’s ‘Golden Age.'”
Acting Labor Secretary Sonderling defended the proposal, stating: “The department’s days of picking winners and losers are over. Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process.”
Oscar Valdés Viera, senior policy analyst at Americans for Financial Reform, characterized the move more sharply. “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,” he said.
The Democratic opposition highlights a broader tension over retirement security. The U.S. has a 22.8% poverty rate among seniors, compared to 5.1% in Denmark, 5.8% in France, and 12.6% in Germany. The Labor Department has not publicly responded to the Sanders-Warren letter or indicated a timeline for a final decision on the rule.
