WASHINGTON, D.C. — The U.S. Department of Labor proposed a rule in 2025 that would allow 401(k) retirement plans to include investments in cryptocurrency, private credit, and private equity assets. The proposal would expand the types of assets that retirement plan fiduciaries could consider under the Employee Retirement Income Security Act.
Acting U.S. labor secretary Keith Sonderling defended the rule, stating, “The department’s days of picking winners and losers are over. Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process.” The department framed the change as a shift toward neutrality, requiring fiduciaries to apply consistent standards regardless of asset class.
Senator Bernie Sanders, Senator Elizabeth Warren, and Representative Bobby Scott sent a joint letter opposing the proposal. The letter stated that the rule would expose an estimated $14.2 trillion in 401(k) retirement savings to volatile assets. “This would strip long-held investor protections from retirement savers and encourage the use of more risky, complex, and expensive investments,” said the letter. It added, “The proposed rule is harmful to American workers.” Oscar Valdés Viera, a senior policy analyst at Americans for Financial Reform, echoed those concerns, stating, “Opening 401ks to these products risks turning workers’ retirement savings into a Ponzi-like scheme that throws a lifeline to an industry scrambling for fresh cash.”
The critics cited recent market instability in digital assets. They referenced a Trump memecoin that reached over $75 per token during Trump’s inauguration in January 2025 before dropping to $2 per token. The Financial Industry Regulatory Authority (Finra) has cautioned that cryptocurrency investments “have experienced higher levels of volatility relative to more traditional investment assets.” Finra also stated, “The risk of losing all of your investment is significant.”
According to the Organisation for Economic Co-operation and Development (OECD), more than 22.8% of seniors in the U.S. live in poverty. The FBI reported that cryptocurrency fraud complaints accounted for over $11 billion in losses by Americans in 2025.