Sanders, Warren Urge Labor Department to Drop Bitcoin, Crypto 401(k) Plan

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. Two senators, one letter, zero enthusiasm for putting Bitcoin next to your bond ladder.

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. "Considered," in this case, appears to be doing some heavy lifting.

"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. Fourteen pages is a long way of saying "please don't."

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 to a much larger market.

Such assets, per the letter, include World Liberty Financial's WLFI and USD1, or the official Trump meme coin. "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