Bernie Sanders and Elizabeth Warren Urge Labor Department to Drop Bitcoin and Cryptocurrency 401K Plan

Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) sent a scathing letter to the head of President Donald Trump’s Department of Labor this week, urging the agency to reconsider a pending rule that would give fiduciaries broad cover to offer riskier assets such as… Bitcoin and other cryptocurrencies in retirement plans.

The proposal a baseintroduced in March, would give fiduciaries immunity for offering volatile and opaque assets like cryptocurrencies, private equity and private credit into 401(k) plans — as long as they stipulate that they consider various factors before granting access.

“The proposed rule is harmful to American workers and inconsistent with the law, congressional intent, existing regulations, and case law,” Sanders and Warren said in a 14-page memo. letter On Monday, it was sent 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.

Lawmakers argued that the new rules assume due diligence — or prudence — on the part of fiduciaries, rather than requiring it, in violation of long-standing requirements established by the Supreme Court and the Employee Retirement Income Security Act of 1974 (ERISA).

They also claimed that 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 Global financial freedomWLFI and USD1, or Official Trump Meme Coin– To a much larger market.

“The change in prudence standard described above expands opportunities for President Trump and his family to profit at the expense of taxpayers, workers, and retirees,” the letter said.

A representative from the Ministry of Labor did not immediately respond DecryptionRequest for comment.

Trump paved the way for the Labor Department’s proposal by signing Executive order Last August, he directed the agency to reevaluate its approach to alternative assets.

Although Sanders and Warren expressed concerns this week about weakening retirement-related fiduciary standards generally, they also emphasized the particular volatility of cryptocurrency investments — and questioned the motives of Trump and other cryptocurrency entrepreneurs who celebrated the policy shift.

“The Department of Labor’s efforts to weaken safeguards preventing retirement savings funds from investing in volatile and highly unregulated digital assets would put Americans’ hard-earned income at risk and benefit the digital asset industry to the detriment of Americans’ retirement savings,” the lawmakers wrote.

Analysts have estimated Exposing US retirement savings accounts to the cryptocurrency market could inject hundreds of billions of dollars into the stagnant sector in the medium term.