Senator Elizabeth Warren on Monday warned Securities and Exchange Commission (SEC) Chair Paul Atkins that allowing Bitcoin (BTC) and other cryptocurrencies into Americans’ retirement accounts is unlikely to deliver better outcomes for workers and could expose pension savings to heightened risk.
What Happened
In a letter dated Jan. 12, Warren wrote that President Donald Trump’s executive order clearing the way for cryptocurrencies in 401(k) plans “endangers investors by clearing the way for pension funds and retirement accounts to hold volatile crypto assets,” urging the SEC to explain how it plans to mitigate the risks posed to everyday Americans’ retirement savings
Warren said the order was issued amid a sharp downturn in the crypto market, noting that after reaching an all-time high in October, Bitcoin fell 33% in just over six weeks and wiped out nearly $800 billion in market value.
She argued that the volatility highlights “concerns about the sector’s volatility, weak investor protections, and lack of transparency,” particularly as regulators consider new rules governing digital assets
“There is no reason to expect that inviting plans to offer these alternative investments will lead to better outcomes overall for participants,” Warren wrote, adding that higher fees, valuation challenges and price swings could make retirement outcomes worse rather than better for most savers
The senator also cited a 2024 Government Accountability Office study, referenced in the letter, which found that crypto assets exhibit “uniquely high volatility” and lack a standardized framework for projecting long-term returns, factors she said are fundamentally incompatible with retirement investing
Warren requested that the SEC outline how it is assessing crypto-related disclosure standards, market manipulation risks, and investor education efforts, setting a January 27 deadline for responses.
Warren’s Stance On Crypto
Warren, the ranking member of the Senate Banking Committee, has been one of Congress’s most vocal critics of the cryptocurrency industry.
She has repeatedly argued that digital asset markets expose consumers to excessive risk, lack sufficient transparency, and are vulnerable to fraud and manipulation.
In previous hearings and public statements, Warren has pushed for tighter enforcement of securities laws in crypto markets and has supported extending anti-money laundering rules to digital asset platforms.
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She has consistently framed her opposition as investor protection rather than opposition to financial innovation, warning that speculative assets should not be marketed to retail investors without robust safeguards.
In the January 12 letter, Warren reiterated those concerns, arguing that for most Americans, a 401(k) represents “a lifeline to retirement security rather than a playground for financial risk,” and that introducing crypto into such plans could result in significant losses that many families cannot afford.
Trump Executive Order Expands Access To Alternative Assets
The warning follows President Trump’s signing of an executive order on August 7 titled “Democratizing Access to Alternative Assets for 401(k) Investors.”
The order directs the Department of Labor and financial regulators, including the Securities and Exchange Commission, to reevaluate existing guidance under the Employee Retirement Income Security Act to broaden the range of assets permitted in defined contribution plans.
Specifically, the order calls for reconsideration of rules governing what qualifies as an acceptable investment option, potentially opening the door to cryptocurrencies, private equity and other alternative assets in workplace retirement plans.
Warren argued that the order could “open the floodgates” for financial firms to push risky products into retirement accounts, while Congress simultaneously considers crypto market structure legislation that could, in her view, allow tokenized financial products to sidestep SEC oversight.
She also raised concerns about conflicts of interest tied to the administration’s embrace of crypto, citing reported financial gains by Trump and his family from digital asset ventures, and warning that policy decisions could amplify risks to retirement savers rather than protect them.
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