Sen. Liz Warren blasts crypto in 401(k)s as too risky, presses SEC Chair Atkins for action

Senator Warren has on Monday sent a letter to the SEC Chair Paul Atkins regarding the agency plans to protect regular Americans from Trump’s crypto in 401(k)s executive order.

Trump had signed a new executive order in August that made it easier for crypto and private equity to be included in 401(k) plans.

Warren says she is concerned about crypto’s volatility, SEC oversight, and Trump’s market manipulation

“For most Americans, their 401(k) represents a lifeline to retirement security rather than a playground for financial risk,” Senator Warren wrote. “Allowing crypto into American retirement accounts creates fertile ground for workers and families to lose big.”

She said, “President Trump’s Executive Order comes amid a recent trillion-dollar nosedive in the cryptocurrency market, underscoring concerns about the sector’s volatility, weak investor protections, and lack of transparency, as well as the President’s financial conflicts of interest.”

Warren also once again called out Trump’s change of position. In 2021, Trump said bitcoin “seems like a scam.” But since winning reelection in 2024, he and his family have gained more than $1.2 billion from crypto investments, according to the Center for American Progress.

“There is no reason to expect that inviting plans to offer these alternative investments will lead to better outcomes overall for participants,” Warren wrote. “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.”

The letter comes just as two Senate committees are working on parts of a new crypto market structure bill. Warren warned that the Trump executive order could create a “tokenization loophole,” where financial products on the blockchain avoid SEC regulation. She said this could put retirement funds and investments in serious danger.

She’s not the only one raising red flags. Unions like the American Federation of Teachers and the AFL-CIO have also come out against the administration’s plan. They are especially worried about the weakening of the SEC’s authority if tokenization spreads without strong oversight. The unions say this could create even more risk for people’s retirement savings.

Warren demands answers as SEC avoids comment on crypto risk in retirement plans

Warren asked the SEC to respond to several questions. She wants to know whether companies that deal in crypto are being honest about liquidity and price swings. She asked if the Division of Risk and Analysis is looking into scams or manipulative behavior in crypto markets, and whether they’ll publish research to warn investors.

She also wants to know what the Office of Investor Education and Assistance is doing to help people understand the risks, especially now that 401(k) providers may start offering crypto options.

Atkins has made his position clear. Back in August, while speaking about “Project Crypto” on CNBC, he said the SEC would work to support Trump’s vision. Trump had said he wanted the U.S. to become “the crypto capital of the world,” and Atkins said the SEC would help build the rules to make that possible.

He added that investor protection remains a top priority, along with making it easier for companies to raise money.

In December, Atkins said his approach would not follow the direction of former Chair Gary Gensler, who pushed heavy regulation of the crypto space. Atkins said the SEC would now move forward and “embrace this new area of innovation.”

He explained more during a speech at the Federal Reserve Bank of Philadelphia. He talked about tokenization, saying the SEC is not softening its rules. “Fraud is fraud,” he said. “If you raise money by promising to build a network, and then take the proceeds and disappear, you will be hearing from us.”

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