Senator Elizabeth Warren Warns SEC Against Allowing Crypto in 401(k)s

Senator Elizabeth Warren, D-Massachusetts, warned the Securities Exchange Commission against allow cryptocurrency in 401(k) plan investing, raising questions about the assets’ “volatility, weak investor protections and lack of transparency.”

The letter, sent Monday, comes shortly before the Senate Committee on Banking markup on the proposed Digital Asset Market Clarity Act—scheduled for Thursday—which would establish a cryptocurrency regulation framework by splitting oversight between the SEC and the Commodity Futures Trading Commission.

In the letter, Warren, who previously criticized Empower Retirement’s decision to allow private market investments in 401(k) accounts, took aim at President Donald Trump’s August 2025 executive order that, among other things, asked the SEC and other government agencies to provide guidance that would allow for easier access to digital assets in retirement plans.

Warren warned that digital assets are too volatile to be offered in retirement plans, a concern shared by some retirement experts, although experts note that the assets would likely exist in exchange-traded funds and comprise less than 10% of an ETF’s assets.

According to Warren’s letter, after hitting an all-time high in October 2025, Bitcoin plunged 33% over six weeks, erasing nearly $800 billion in value, then declined further in December. Bitcoin was up 4.21% in 2026 from its January 1 open through the market close on January 12.

“The EO will open the floodgates for financial firms to gamble with trillions of dollars of workers’ retirement savings assets by pushing risky assets, including cryptocurrencies, into defined contribution plans,” the letter stated.

Warren added that there is no reason to expect better overall outcomes for participants by allowing plans to offer these alternative investments—particularly given their higher fees and expenses.

The senator also cited her concerns about the president’s personal ties to digital assets, which she called a “conflict of interest.” Warren concluded the letter by asking the SEC what disclosures, investor protections and research it intends to provide concerning digital assets.