Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) sent a blistering letter to the head of President Donald Trump’s Labor Department this week, urging the agency to reconsider a pending rule that would give fiduciaries wide cover to offer riskier assets like Bitcoin and other cryptocurrencies in retirement plans.
The proposed rule, floated in March, would grant fiduciaries the immunity to offer volatile and opaque assets like crypto, private equity, and private credit in 401(k) plans—so long as they stipulate that they considered various factors before offering access.
“The proposed rule is harmful to American workers and counter to statute, Congressional intent, existing regulations, and case law,” Sanders and Warren said in a 14-page letter sent Monday to Acting Labor Secretary Keith Sonderling. The letter was also signed by Rep. Bobby Scott (D-VA), the top Democrat on the House Education and Labor Committee.
The lawmakers argued the new rules would presume due diligence—or prudence—on the part of fiduciaries, instead of requiring it, in violation of longstanding requirements established by the Supreme Court and the 1974 Employee Retirement Income Security Act (ERISA).
They further claimed such a weakening of standards in the $10 trillion retirement plan industry could directly benefit President Donald Trump, by exposing digital assets issued by him and his family—such as World Liberty Financial’s WLFI and USD1, or the official Trump meme coin—to a much larger market.
“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 reads.
A representative for the Labor Department did not immediately respond to Decrypt’s request for comment.
Trump paved the way for the Labor Department proposal by signing an executive order last August, directing the agency to reevaluate its approach to alternative assets.
Though Sanders and Warren expressed concerns this week about weakening retirement-related fiduciary standards generally, they also underscored the particular volatility of crypto investments—and questioned the motives of Trump and other crypto entrepreneurs who have celebrated the policy shift.
“The DOL’s efforts to weaken safeguards that deter retirement saving funds from being invested into volatile and largely unregulated digital assets would jeopardize Americans’ hard earned income and benefit the digital asset industry at the cost of Americans’ retirement savings,” the lawmakers wrote.
Analysts have estimated that exposing American retirement savings accounts to the crypto market could infuse the sluggish sector with hundreds of billions of dollars in investment in the medium-term.
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