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

Sens. Sanders and Warren joined Rep. Bobby Scott in a 14-page letter urging the DOL to scrap a Trump-era rule that would open $14.2 trillion in retirement savings to crypto and other alternative assets.

Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA), joined by Rep. Bobby Scott (D-VA), ranking member of the House Committee on Education and Workforce, sent a 14-page letter Monday to Acting Labor Secretary Keith Sonderling urging the Department of Labor to scrap the proposed Fiduciary Duties in Selecting Designated Investment Alternatives rule that would open 401(k) plans to cryptocurrencies and other alternative assets.

The Labor Department proposed the rule on March 30, 2026, following President Trump’s executive order directing the agency to clear the way for alternative assets in retirement plans. The rule would establish a safe harbor for fiduciaries who offer alternative investments, including private equity, real estate, and digital assets, shielding them from liability if they evaluated certain factors, including fees, performance, liquidity, valuation, complexity, and benchmarks, before selecting an investment option.

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This story is an excerpt from the Unchained Daily newsletter.

The lawmakers argued the rule fundamentally violates the 1974 Employee Retirement Income Security Act (ERISA) by presuming fiduciary prudence rather than requiring it. “The proposed rule is harmful to American workers and counter to statute, Congressional intent, existing regulations, and case law,” the letter said. They warned the rule would encourage retirement plans to allocate portions of the roughly $14.2 trillion held in U.S. retirement accounts to “more risky, complex, and expensive investments” and would strip long-held investor protections from retirement savers.

A significant portion of the letter focused on digital assets specifically. The lawmakers cited cryptocurrencies’ volatility, naming Trump’s own memecoin $TRUMP, which hit an all-time high of over $73 but has since fallen to closer to $2 at the time of writing. They also raised concerns that the rule could directly enrich Trump and his family by expanding access to crypto products tied to him, such as World Liberty Financial’s WLFI and USD1 stablecoins. “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 read.

The timing is consequential. The letter landed on June 1, the same day the rule’s 60-day public comment period closed.

The Labor Department will now review comments before deciding whether to finalize, revise, or drop the proposal. A Labor Department spokesperson told Decrypt the agency received the letter and was reviewing it. The agency has framed the rule as a move to “democratize access” to investments that have largely been off-limits to ordinary retirement savers, while the Sanders/Warren coalition is arguing the opposite framing: that ordinary savers should be protected from access to those investments because the risk-adjusted returns do not justify the exposure. The decision rests with the Trump-appointed acting secretary.