What are US lawmakers asking the Labor Department to do about crypto in 401(k) plans?

Senator Bernie Sanders, Senator Elizabeth Warren and Representative Bobby Scott want the US Labor Department to withdraw a proposal that would allow cryptocurrencies and other alternative assets in 401(k) retirement plans. They argue that these assets are too risky for long-term retirement savings.

Why do some lawmakers oppose adding crypto to 401(k) retirement accounts?

The lawmakers say cryptocurrencies can be highly volatile and may lack sufficient investor protections. They also argue that fraud, market manipulation and regulatory uncertainty could expose retirement savers to significant losses.

What is the Labor Department's proposal for 401(k) plans?

The proposal would make it easier for retirement plans to offer alternative assets such as digital assets, private equity and private credit. The policy aligns with a 2025 executive order from President Donald Trump aimed at expanding access to alternative investments.

How much money is held in US 401(k) plans?

According to the Investment Company Institute, Americans held approximately $10.1 trillion in 401(k) retirement plans as of Dec. 31. That makes any policy change affecting these accounts significant for both investors and financial markets.

Would cryptocurrencies become a standard part of every 401(k) plan?

No. Even if the proposal moves forward, individual retirement plan providers would decide whether to offer crypto-related investment options. Investors would generally choose whether to allocate part of their retirement savings to those assets.

Why are lawmakers concerned about crypto regulation?

The lawmakers claim that enforcement against crypto fraud has weakened and that the legal treatment of digital assets remains uncertain. They argue that some protections available to traditional securities investors may not apply to crypto investors.

How could crypto exposure affect retirement portfolios?

Crypto could potentially boost returns during strong market cycles, but it could also increase portfolio volatility and downside risk. Retirement investors typically focus on long-term wealth preservation, making risk management especially important.

What does this mean for Bitcoin and other cryptocurrencies?

The letter itself does not change any laws or regulations. However, it highlights ongoing political divisions over crypto adoption and could influence future debates about how digital assets are integrated into mainstream financial products.

Image for illustrative purposes only. Not a real photo.

Lawmakers challenge crypto push for $10.1T 401(k) market

Written by Isaac FrancisPublished Jun 2, 2026, 11:56 PM

Senior Democratic lawmakers have called on the US Labor Department to abandon plans that would allow cryptocurrencies and other alternative assets to be included in Americans’ 401(k) retirement plans.

In a letter sent on Tuesday, Senator Bernie Sanders, Senator Elizabeth Warren and Representative Bobby Scott urged acting Labor Secretary Keith Sonderling to rescind a proposal covering digital assets, private equity, private credit and other non-traditional investments.

“The application of securities laws to crypto assets is rapidly evolving, and many securities law protections that investors have for public securities may not be available for crypto,”

The lawmakers said in the letter.

The lawmakers argued that the policy could expose retirement accounts to highly volatile assets and claimed that insufficient regulation and safeguards leave many cryptocurrencies vulnerable to fraud and investor harm.

They also criticised the current administration’s approach to crypto oversight, alleging that enforcement against digital asset fraud has been weakened at agencies including the SEC.

The proposal was announced by the Labor Department in March and followed an August 2025 executive order from President Donald Trump directing federal agencies to expand access to alternative assets, including cryptocurrencies, for retail investors.

The lawmakers further questioned whether the policy could benefit individuals connected to the administration, citing Trump family ties to crypto venture World Liberty Financial, while noting that Americans held roughly $10.1 trillion in 401(k) plans at the end of 2025.

At the time of reporting, World Liberty Financial price was $0.05891.