Democrats oppose Trump officials’ effort to include crypto in 401(k) plans

Change backed by labor department would expose workers to greater financial risk, letter shared with Guardian says

Congressional Democrats are strongly opposing a US Department of Labor proposal that would allow 401(k) investments to include cryptocurrency, private credit and private equity assets, arguing the change will expose workers to riskier and more complex investments.

In a letter shared exclusively with the Guardian, Senator Bernie Sanders, Senator Elizabeth Warren and House education and workforce committee ranking member Bobby Scott of Virginia, argued the rule would expose an estimated $14.2tn of 401(k) retirement savings to volatile assets and would probably not withstand a challenge in court.

“This would strip long-held investor protections from retirement savers and encourage the use of more risky, complex, and expensive investments,” said the letter. “The proposed rule is harmful to American workers.”

These high-risk assets can experience extreme volatility, the Democrats said, citing Trump’s memecoin , which soared to over $75 per token during Trump’s inauguration in January 2025 but has since dropped to $2 per token.

The letter noted seniors in the US were already struggling financially, with more than 22.8% of seniors in the US living in poverty, according to the Organisation for Economic Cooperation and Development (OECD), compared with just 5.1% in Denmark, 5.8% in France, 12.6% in Germany and 14.8 % in Canada.

The proposal could also expose workers to higher fees and erode their long-term returns.

The Financial Industry Regulation Authority (Finra) cautions that crypto investments “have experienced higher levels of volatility relative to more traditional investment assets” and “the risk of losing all of your investment is significant”.