Sen. Elizabeth Warren has written directly to Securities and Exchange Commission Chairman Paul Atkins asking for clarification on how the SEC intends to fulfill its mission of protecting investors as it seeks to uphold President Trump’s order to allow cryptocurrency investments in retirement plans.
In August, President Trump signed an executive order clearing the way for alternative assets, including cryptocurrencies like Bitcoin and private equity funds, to be more widely offered across traditional retirement plans such as 401(k) plans.
“For most Americans, 401(k)s represent a lifeline to retirement security, not a playground of financial risk. Allowing cryptocurrencies into American retirement accounts would create fertile ground for the great loss of workers and families,” the Massachusetts Democrat, ranking member of the Senate Banking, Housing and Urban Affairs Committee, wrote to Atkins in a Monday letter obtained exclusively by CNBC. “Given the threats posed by cryptocurrencies’ volatility, lack of market transparency, and potential conflicts of interest, we are concerned that the Trump Administration’s decision to allow these risk assets as part of such important retirement investments threatens the retirement security of millions of Americans.”
Warren cited a 2024 Government Accountability Office study that found that “cryptoassets have uniquely high volatility” and that “there is no standard approach for predicting the potential future returns of cryptoassets.”
She also pointed to President Trump’s own flipsides on cryptocurrencies, from his comments in 2021 that Bitcoin “looks like a scam” to an estimate by the left-leaning think tank Center for American Progress that Trump and his family amassed more than $1.2 billion in economic profits from cryptocurrencies in the roughly one year following his reelection in November 2024.
“There is no reason to expect that attraction plans that offer these alternative investments will lead to better outcomes overall for participants, especially given the high fees and expenses that are typically associated with them. However, there is good reason to believe that these investment options exacerbate the situation by increasing the risk of large losses for participants, most of whom cannot afford to participate,” Warren wrote in a letter to the SEC.
The senator sent this letter the same week that two Senate committees are holding hearings to address their respective parts of the Cryptocurrency Market Structure Act. The president’s executive order “comes as Congress considers a virtual currency market structure bill that could create a tokenization loophole that would allow nearly all financial products offered on the blockchain to circumvent the SEC’s securities regulatory authority, putting Americans’ retirement savings and investments at risk,” Warren said in the letter.
Warren is not alone in warning of the broader financial dangers that could arise from the Trump administration’s approach to regulating cryptocurrencies. Several major labor unions have publicly expressed concerns, including the American Federation of Teachers and the AFL-CIO. Unions also worry that the administration’s plan to allow the tokenization of financial products could undermine the SEC’s authority to regulate securities, which could introduce new risks to Americans’ retirement savings and investments.
In her letter, Warren asked the SEC to answer the following questions to better understand how the agency plans to mitigate the risks associated with cryptocurrencies:
In requiring public companies that hold, issue, or invest in cryptocurrencies to make disclosures regarding the liquidity, impairment risk, and market volatility of cryptoassets, did the SEC ensure that the valuations reflected in the disclosures were fair market values given the volatility that cryptoassets often experience?
Has the SEC’s Office of Risk Analysis evaluated the use of manipulative or deceptive practices in the cryptocurrency markets? If not, does it plan to release any findings to increase retail investor awareness? What investor awareness does the SEC Office of Investor Education and Assistance provide to retail investors who may purchase crypto assets through retirement plans, either traditionally or under the Trump Administration’s recent executive orders?
The SEC, through a spokesperson, declined to comment on Warren’s letter.
The Trump administration’s pro-crypto stance and Atkins’ previous statements suggest that Warren’s opinion is unlikely to have much influence on the SEC, but Atkins has emphasized the need to balance crypto innovation with investor protection. While discussing the SEC’s “Project Crypto” on CNBC in August, Atkins said, “After the challenge that President Trump has posed, the goal is to make America the crypto capital of the world.”
He said: “There are many ways that we can support that. Among them are appropriate rules that are fit for purpose in the crypto industry, allowing innovators to innovate, investors knowing what they are investing in and giving everyone confidence… There is a balance because investor protection is our top priority, as is capital formation and innovation in the capital markets.”
Atkins recently appeared on CNBC in December and emphasized that his approach as SEC chairman would be different from that of former SEC Chairman Gary Gensler, who sought to aggressively regulate the industry. Under Atkins, the SEC intends to “advance the crypto space and ensure that the United States embraces this new area of innovation that we have fundamentally resisted for far too long,” he said.
In a speech at the Philadelphia Fed in November, Atkins laid out many of the details of his broader vision for cryptocurrency innovation and regulation, including the key issue of asset tokenization. In that speech, the SEC chairman also said, “Now, let me be clear about what this framework is not. It does not promise lax enforcement at the SEC. Fraud is fraud. … If you raise money with the promise of building a network, take the proceeds, and disappear, you will hear from us and we will pursue you to the fullest extent of the law.”
