On June 3, Senator Bernie Sanders, Elizabeth Warren, and Representative Bobby Scott sent a letter to U.S. Acting Labor Secretary Keith Sunderlin, calling for the rescission of a proposal that would allow private equity, digital assets, private credit, and other “alternative assets” to be included in 401(k) retirement plans. The letter states that the volatility of digital assets and a “lack of regulation and safeguards” could endanger Americans’ retirement savings.
Background of the Department of Labor proposal: Announced in March 2026, based on an August 2025 executive order
In March 2026, the Department of Labor released a proposed policy allowing alternative assets to be included in 401(k) plans. The move stems from an executive order signed by Trump in August 2025, instructing agencies to “expand access to alternative assets,” including cryptocurrencies. The categories of alternative assets covered by the proposal include private equity, digital assets (cryptocurrencies), private credit, and other alternative assets.
Three core accusations in the lawmakers’ letter: volatility, regulatory gaps, and conflicts of interest
The three lawmakers’ letter raises three specific allegations:
First, the risk of volatility in digital assets, saying “highly volatile assets such as digital currency” would expose retirement accounts to excessive risk;
Second, insufficient regulatory and protective measures. The letter cites the following specific wording: “The applicability of securities laws in crypto assets is changing rapidly, and many securities-law protections that investors have when buying publicly traded securities may not apply to cryptocurrencies,” and it argues that the current administration has weakened the SEC’s enforcement efforts against crypto fraud;
Third, conflicts of interest. The lawmakers question whether the policy would benefit anyone in the government, and point out that Trump has “serious conflicts of interest” in crypto-related companies such as “World Liberty Financial.”
Democratic Party position on the CLARITY Act: moral provisions as a condition for voting
The CLARITY Act (Digital Asset Market Structure Act) is expected to be considered by the U.S. Senate soon. Sanders, Warren, and Scott have already advanced similar arguments in amendments to the bill. In public statements, the Democratic senators confirmed that they will not vote for any version of the CLARITY Act that does not include moral provisions; as of the time of reporting, details of the specific moral provisions had not been disclosed.
FAQ
Has the Department of Labor’s 401(k) crypto asset proposal taken effect yet?
The Department of Labor announced this proposed policy in March 2026. As of June 3, the three Democratic lawmakers have formally sent letters calling for its rescission, but the final status of the proposal has not been confirmed, and the Department of Labor has not issued a public response to the request to withdraw the proposal.
Which committees do the three lawmakers serve as senior members on, respectively?
Bernie Sanders is a senior member of the Senate Committee on Banking; Elizabeth Warren is a senior member of the Senate Committee on Health, Education, Labor, and Pensions; and Bobby Scott is a senior member of the House Committee on Education and the Workforce.
What exactly do the Democrats’ moral provisions requirements in the CLARITY Act target?
The Democrats’ letter and amendments both point to the Trump family’s business interests in crypto companies such as “World Liberty Financial,” arguing that in the absence of moral provision constraints, related crypto regulations may create conflicts between the personal interests of government officials and public policy decisions. As of the time of reporting, the specific text of the moral provisions had not been publicly disclosed.
