Sanders, Warren, and Scott Demand Labor Halt Crypto in 401(k)s Proposal

Leading Democrats in the US Senate and House of Representatives demanded that the Department of Labor halt plans to include digital and “alternative assets” in Americans’ 401(k) retirement plans, urging Acting Secretary Keith Sonderling to withdraw the proposal.

Senator Bernie Sanders, Senator Elizabeth Warren, and Representative Bobby Scott said the policy would “expose retirement accounts to exceptionally volatile assets, like digital currency,” citing a “lack of regulation and safeguards” that puts cryptocurrencies at risk of fraud.

CNBC

The proposal, announced by the Labor Department in March, followed an August 2025 executive order signed by US President Donald Trump directing agencies to “democratize access to alternative assets,” including crypto.

The lawmakers also questioned whether the Labor Department policy would financially benefit anyone in the current administration, highlighting Trump’s family’s crypto venture, World Liberty Financial.

The Investment Company Institute figure cited in the coverage put Americans’ 401(k) holdings at about $10.1 trillion as of Dec. 31, as the dispute over crypto access in retirement accounts escalated.

In a letter described as a Tuesday letter, Sanders, Warren, and Scott argued that the change would “strip long-held investor protections from retirement savers” and encourage “more risky, complex, and expensive investments.”

The letter also warned that the proposal would likely not survive a court challenge, while the coverage tied the risk to how alternative assets can behave during market stress.

CoinDesk

The lawmakers said the current administration had weakened enforcement of crypto fraud at financial agencies like the Securities and Exchange Commission (SEC), and they argued that “many securities law protections that investors have for public securities may not be available for crypto.”

TradingView’s account of the letter put an estimated $14.2 trillion in 401(k) savings at risk from the DOL proposal, framing the potential impact as far larger than the $10.1 trillion figure cited elsewhere.

In the same dispute, the Financial Industry Regulatory Authority (Finra) cautioned that crypto investments “have experienced higher levels of volatility relative to more traditional investment assets,” adding that “the risk of losing all of your investment is significant.”

Democrats also raised ethics and conflict-of-interest concerns, arguing that the proposal could present a conflict because Trump was “rife with conflicts of interest in this area,” including his family’s crypto venture, World Liberty Financial.

“Source: Senate Banking Committee They said the policy would “expose retirement accounts to exceptionally volatile assets, like digital currency,” citing a “lack of regulation and safeguards” putting many cryptocurrencies at risk of fraud”

Cointelegraph

The coverage said Democrats would not vote for any legislation that doesn’t contain provisions on ethics, linking the 401(k) fight to broader legislative efforts such as amendments to the digital asset market structure bill, the CLARITY Act, expected to be addressed in the US Senate soon.

On the other side, the acting labor secretary’s counterpart, Keith Sonderling, said: “The department’s days of picking winners and losers are over.”

Sonderling added that “Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process,” while Treasury Secretary Scott Bessent defended the move as advancing the administration’s broader goals.

The dispute also drew in fraud-loss figures, with the TradingView account citing that the FBI reported Americans reported more than $11 billion in losses in 2025, underscoring Democrats’ argument that crypto access adds another layer of danger beyond market swings.