A Labor Department plan to let retirement plan fiduciaries offer workers exposure to cryptocurrency and private equity in 401(k) accounts is facing fierce opposition from two of Washington's most prominent Democrats. Senators Bernie Sanders and Elizabeth Warren have urged the department to scrap the proposal, arguing it would harm retirees and personally benefit President Trump.
Why the senators say retirees lose
In a letter sent this week, Sanders and Warren said the rule would push ordinary savers into volatile assets they don't understand. Cryptocurrency can lose half its value in a bad week. Private equity funds lock up money for years and charge fees that eat into returns. The senators argued that's a recipe for disaster for people saving for retirement. They said the plan ignores basic principles of retirement investing: safety, liquidity, and low costs.
They didn't offer a compromise. They want the entire plan withdrawn.
The Trump accusation
The lawmakers also claimed the rule was designed to enrich President Trump. They didn't explain exactly how, but the allegation points to potential conflicts of interest. Sanders and Warren have a long track record of probing Trump's financial ties, and this letter fits that pattern. The accusation raises the political stakes. Any move by the Labor Department to finalize the rule could now be framed as benefiting Trump personally.
It's a sharp turn from policy debate to personal attack — and it's likely to grab attention. The charge adds a layer of political toxicity to an already contentious rulemaking.
What happens now
The senators asked the Labor Department to stop the rulemaking process entirely. They said the plan is flawed at the core and can't be salvaged with tweaks. The letter is a direct challenge to the administration's push to broaden retirement investment options. It puts the department on notice that two powerful senators are watching — and ready to fight.
The senators have drawn a line. The decision now rests with the Labor Department.
