Top Democrats on three House and Senate committees have called on the U.S. Department of Labor to end plans to allow digital assets and “alternative assets” to be held in Americans’ retirement plans.
In a letter Tuesday, Sen. Bernie Sanders, Sen. Elizabeth Warren and Rep. Bobby Scott request Acting Labor Secretary Keith Sonderling rescinded the department’s proposal to allow the inclusion of private equity, digital assets, private credit and other “alternative assets” in 401(k) plans.
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.
As ranking members of the Senate Banking Committee, the Senate Committee on Health, Education, Labor and Pensions, and the House Committee on Education and Workforce, respectively, they said the current administration has weakened crypto fraud enforcement at financial agencies like the Securities and Exchange Commission (SEC).
“The application of securities laws to crypto assets is evolving rapidly, and many of the securities legal protections that investors enjoy for public securities may not be available for crypto,” the letter said. “This lack of sufficient safeguards is likely to harm investors. »
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The proposed policy, announcement by the Department of Labor in March, following an August 2025 executive order from US President Donald Trump direction agencies to “democratize access to alternative assets,” including crypto. According to the Investment Company Institute, Americans detained approximately $10.1 trillion in 401(k) plans as of December 31.
The Trump Family Conflict of Interest 401(k) Order and the CLARITY Act
Sanders, Warren and Scott questioned whether the Labor Department’s policy would financially benefit anyone in the current administration, given that Trump was “plagued by conflicts of interest in this area,” including his family’s crypto business, World Liberty Financial.
Lawmakers made similar arguments in proposing amendments to a digital asset market structure bill, the CLARITY Act, which is expected to be considered by the U.S. Senate soon. Democrats in this chamber have said they will not vote for any legislation that does not contain ethics provisions.
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