"Trump's Crypto Retirement Plan" Slammed by Democrats: Accused of "Plundering" American Workers' Pensions
- Core Point: U.S. Democratic Senators Sanders and Warren have jointly written to the Department of Labor, strongly opposing a proposed rule that would allow retirement savings accounts (401(k)) to invest in cryptocurrencies like Bitcoin. They argue this would jeopardize workers' finances and allow the Trump family to profit improperly.
- Key Elements:
- The new rule provides protection for 401(k) fiduciaries, allowing them to offer volatile assets like cryptocurrencies, provided they can demonstrate they have weighed the relevant factors. This is seen as reversing existing prudent standards.
- The Democrats argue that the rule violates laws and legal precedents, exposing approximately $14.2 trillion in U.S. retirement funds to highly volatile and under-regulated assets.
- FBI data indicates that losses from cryptocurrency scams exceeded $11 billion in 2025, the highest of any cybercrime category, highlighting the extreme risk involved.
- Criticism directly targets a conflict of interest: the Trump family's crypto business has already raised around $5 billion, and the expanded rule could allow them to profit at the expense of retirees.
- The letter points out that over 22.8% of U.S. seniors live in poverty, underscoring the high vulnerability of retirees to significant losses.
Original Author: Micah Zimmerman
Original Translation: AididiaoJP, Foresight News
Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) have called on the Labor Department of the Trump administration to rescind a rule that would open U.S. retirement savings accounts to Bitcoin and other cryptocurrencies. The lawmakers argue that this move would endanger workers' financial futures while benefiting President Trump and his family.
On Monday, the three Democrats sent a 14-page letter to Acting Labor Secretary Keith Sonderling. Sanders and Warren, along with Representative Bobby Scott (D-VA), the ranking minority member of the House Committee on Education and the Workforce, strongly condemned the rule proposed by the Labor Department in March.
The rule would provide protections for fiduciaries of 401(k) plans, allowing them to offer volatile assets—including cryptocurrencies, private equity, and private credit—provided they can demonstrate they weighed relevant factors before offering them.
"The proposed rule harms American workers and contradicts the law, congressional intent, existing regulations, and case law," the letter stated.
What Impact Would This Rule Have?
The proposal stems from an executive order signed by President Trump last August, which directed the Labor Department to review the handling of alternative assets in retirement plans. Under current law, fiduciaries managing 401(k) plans must adhere to a strict "prudent" standard—a requirement rooted in the Employee Retirement Income Security Act of 1974 (ERISA) and reinforced by Supreme Court precedent.
The Democratic lawmakers argue that the new rule would reverse this standard. Instead of needing to prove they conducted due diligence, fiduciaries would be presumed to have met their duty of prudence as long as they followed the procedural steps outlined in the rule.
The lawmakers stated that this shift conflicts with decades of legal precedent and would expose the approximately $14.2 trillion in U.S. 401(k) accounts to assets characterized by extreme price volatility and limited regulation.
The Financial Industry Regulatory Authority (FINRA) has warned that crypto investments "exhibit higher volatility compared to traditional investment assets" and carry a "significant risk of losing the entire investment." Reports from the Federal Bureau of Investigation (FBI) indicate that cryptocurrency scam losses exceeded $11 billion in 2025, making it one of the highest-loss categories in cybercrime.
The Trump Conflict of Interest Argument
The Democratic lawmakers' criticism extends beyond retirement policy, directly pointing to conflicts of interest. Trump's adult children manage the family's cryptocurrency business, which, according to the Wall Street Journal, has raised approximately $5 billion for the Trump family since launching its digital currency last September.
The Trump family's crypto portfolio includes World Liberty Financial’s WLFI and USD1 tokens, as well as the official Trump meme coin—which surged to over $75 during Trump’s inauguration in January 2025 before crashing to around $2.
"The aforementioned change to the prudence standard expands opportunities for President Trump and his family to profit at the expense of taxpayers, workers, and retirees," the letter wrote.
Consumer advocacy group Americans for Financial Reform echoed similar concerns. Oscar Valdés Viera, a senior policy analyst at the organization, stated, "Opening up 401(k) accounts to these products could turn workers' retirement savings into a vehicle akin to a Ponzi scheme, providing a lifeline to an industry desperate for new capital."
The letter also cited data on elderly poverty: Over 22.8% of seniors in the U.S. live in poverty, compared to 5.1% in Denmark, 5.8% in France, and 12.6% in Germany—highlighting the risk that retirees cannot afford significant losses.
The Administration's Defense
The Trump administration describes the rule as a step to expand workers' choices.
"The days of the Labor Department picking winners and losers are over," Acting Labor Secretary Sonderling said in a statement. "Our rule makes it clear that managers must assess any potential product offering by following a prudent process."
Treasury Secretary Scott Bessent also expressed support, calling the rule "another step toward ushering in President Trump's 'Golden Age.'"
