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US Senator Elizabeth Warren is concerned about President Donald Trump’s order to make cryptocurrency investments available in retirement plans. In a letter sent to Securities and Exchange Commission (SEC), the Massachusetts lawmaker, who is a ranking member on the on the Senate Banking, Housing and Urban Affairs Committee, has asked Chairperson Paul Atkins to explain how the agency plans to serve its mission of investor protection as it seeks to support Trump’s order.
This comes after the US President signed an order in August which aims to make it easier for 401(k) plans and other retirement funds to include “alternative assets” like Bitcoin and private equity.In the letter sent to SEC’s Atkins (reviewed by CNBC), Warren wrote: “For most Americans, their 401(k) represents a lifeline to retirement security rather than a playground for financial risk. Allowing crypto into American retirement accounts creates fertile ground for workers and families to lose big. Given the threats from crypto’s volatility, the market’s lack of transparency, and potential conflicts of interest, I am concerned that the Trump Administration’s decision to allow these risky assets to be part of such critical retirement investments threatens millions of Americans’ retirement security.”In the letter, Warren also cited a 2024 Government Accountability Office study which found that “crypto assets have uniquely high volatility” and “there is no standard approach for projecting the potential future returns of crypto assets.”
She even pointed to Trump's own change of position on crypto. In 2021, Trump had commented that bitcoin "seems like a scam." However, an estimate from US think tank Center for American Progress claimed that in the roughly one-year period after his re-election in November 2024, Trump and his family had gained over $1.2 billion in financial gains from crypto.“There is no reason to expect that inviting plans to offer these alternative investments will lead to better outcomes overall for participants — especially considering the higher fees and expenses that typically come with them. But there is ample reason to think these investment options will make things worse by increasing the risk of large losses for participants, most of whom can ill afford them,” Warren wrote in the letter.
Elizabeth Warren wants SEC to answer questions about reducing crypto risks
In the letter, Warren asked the SEC to answer the following questions so she can better understand how the SEC plans to reduce risks related to crypto:
- In requiring publicly traded companies that hold, issue, or invest in cryptocurrencies to provide disclosures on crypto asset liquidity, impairment risks, and market volatility, has the SEC ensured that the valuations reflected in disclosures are fair market value given the volatility crypto securities often experience?
- Has the SEC’s Division of Risk and Analysis assessed the use of manipulative or deceptive practices in crypto markets? If not, does it plan to publish research for retail investor awareness?
- What investor awareness does SEC Office of Investor Education and Assistance provide for retail investors that may purchase crypto assets traditionally or through retirement plans following the Trump Administration’s recent executive order?
Warren also warned that a new crypto policy could weaken the SEC’s power to regulate financial products. She noted that this could put people’s investments and retirement savings at major risk. Apart from Warren, ,ajor unions, including American Federation of Teachers and AFL-CIO have also raised concerns about the dangers of allowing more financial products on the blockchain.
English (US) ·