Senators Warn Trump Order Exposes Millions to 401(k) Crypto Risks

Senators Elizabeth Warren, Bernie Sanders, and several Democratic colleagues have raised serious concerns about President Donald Trump's executive order that encourages the inclusion of cryptocurrencies and private equity in 401(k) retirement plans. They warn that this policy shift, which reverses previous Department of Labor guidance urging caution, exposes millions of Americans to financial risks due to the volatility, illiquidity, and lack of transparency associated with these alternative assets. The lawmakers argue that such investments, unlike traditional public market assets, lack sufficient investor protections and could jeopardize retirees' financial security, especially given the speculative nature of cryptocurrencies that do not generate cash flow. While supporters of the executive order claim these assets could offer growth and diversification benefits, critics emphasize the potential for unpredictable swings and lock-up periods that limit access to funds during emergencies. The senators' letter to SEC Chair Paul Atkins and Labor Secretary Lori Chavez-DeRemer highlights prior government studies and SEC risk alerts underscoring compliance and transparency issues within private funds. This debate reflects a broader tension between expanding investment options in retirement portfolios and safeguarding the financial well-being of American workers.