Democratic Senators Urge DOL to Reinstate Crypto Warning for 401(k) Plans

Four Democrats in the U.S. Senate wrote to the Department of Labor urging it to reconsider its recent decision to withdraw guidance cautioning employers against including cryptocurrency in 401(k) retirement plans.

The June 13 letter addressed to Secretary of Labor Lori Chavez-DeRemer and signed by Senators Dick Durbin, D-Illinois; Tina Smith, D-Minnesota; Chris Van Hollen, D-Maryland; and Elizabeth Warren, D-Massachusetts expressed “strong concern” that rescinding the prior warning removes essential protections for American workers’ retirement savings. In particular, the senators cited concerns about price volatility and the potential for scams.

Last month, the DOL of President Donald Trump decided to reset its stance to “neutral” on cryptocurrency options in 401(k) plans from previous guidance authored by the administration of former President Joe Biden that urged plan sponsors to exercise “extreme care” when considering whether to include the investment.

“With the administration’s continuing—and constantly changing—trade wars, this volatility will continue,” the letter stated. “Americans need certainty in their retirement investment accounts, not an unregulated, highly speculative asset that could drastically change the value of their 401(k) plan on a minute-to-minute basis. …The cryptocurrency market is extremely volatile, making it unfit to serve as a retirement investment tool.”

The letter singled out the dramatic swings in the value of bitcoin, ranging from less than $17,000 to more than $111,000 in just five years, as evidence of the asset class’s instability. The senators also cited a recent 10% plunge in bitcoin’s value following Trump’s April announcement of new tariffs, a drop they argued underscores crypto’s sensitivity to global policy shifts.

Trump’s tariffs created large market swings in nearly all asset classes, felt most severely after his April 2 “Liberation Day” speech. Typically, the introduction of new tariffs has caused market downturns, whereas relaxed trade policies, or the expectation that trade agreements are likely,havelikely, have led to market rallies.

Corporations with ties to the president or his family also are involved in many aspects of the cryptocurrency industry, including companies that have issued memecoins and dollar-backed stablecoins and others that mine bitcoin.