A group of Democratic and independent legislators led by Senators Elizabeth Warren and Bernie Sanders is raising concerns over a recent executive order from President Donald Trump that expands access to private market funds and cryptocurrencies within 401(k) retirement plans, warning that it could expose millions of Americans to heightened financial risk.
In a joint letter sent October 28 to Labor Secretary Lori Chavez-DeRemer and Securities and Exchange Commission Chairman Paul Atkins, Warren, Sanders, and five colleagues questioned the administration’s decision to reverse previous Department of Labor guidance that had cautioned against including private equity and crypto assets in retirement plans.
Building on Warren's previous inquiries around private market investments in 401(k)s, the lawmakers argued that the new policy could undermine investor protections and leave savers vulnerable to volatile and illiquid investments.
“The Executive Order exposes these hard-earned savings to volatile financial instruments, while attempting to rebrand them as ‘alternative assets,’ although they lack transparency and have exaggerated claims of high returns,” the senators wrote in an open letter Tuesday.
They cited recent SEC risk alerts detailing compliance failures among private funds, including conflicts of interest, high fees, and a lack of transparency around valuations.
The letter also highlighted the illiquidity of private investments, noting that lengthy lock-up periods could prevent retirement savers from accessing their funds during economic downturns or personal emergencies.
“This raises serious concerns during economic downturns when retirement savers are seeking to access their investments,” the senators said.
On the issue of digital assets, the lawmakers pointed to the Department of Labor’s 2022 guidance, which had urged plan fiduciaries to exercise “extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.”
The letter criticized the administration for rescinding that guidance “abruptly and without clear reasoning,” and questioned whether sufficient safeguards remain in place for retirement savers.
The senators also raised questions about potential conflicts of interest, referencing media reports that the Trump family has benefited financially from crypto ventures.
According to a new Reuters investigation, the Trump Organization’s income surged in the first half of 2025, with more than 90% of the $864 million total coming from crypto-related ventures, including sales of World Liberty tokens and a Trump-branded meme coin. The report estimated that the family made as much as $5 billion in paper wealth after launching a new digital currency.
“How can the American people trust the advice they get from an Administration that stands to potentially further profit by this move?” the senators wrote.
Industry observers note that while private market and crypto investments can offer diversification, they also carry unique risks. Carter Davis, an assistant professor of finance at The Ohio State University who reviewed the Reuters analysis, said the Trump family’s pivot to crypto represents “a massive pivot” for the business.
“Even if you go through and you do the most conservative estimate…it's pretty wild that you end up with such a huge fraction of the income coming from crypto,” Davis told Reuters.
The lawmakers’ letter concluded with a series of questions for the Labor Department and SEC, seeking clarity on how fiduciary duties will be maintained, what studies have been conducted on the potential profits for private equity and the Trump family, and what steps regulators plan to take to ensure transparency and investor protection in private and digital asset markets.
The agencies were asked to respond by November 17.
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