The U.S. Department of Labor has proposed a rule designed to make it harder to sue retirement plan fiduciaries that invest in risky, more volatile assets. The rule is also President Donald Trump’s administration’s latest giveaway to the Trump family’s favorite industry: Cryptocurrency.
Drawing on Trump’s August 2025 executive order titled, in part, “Democratizing Access to Alternative Assets,” the Labor Department rule highlights a non-exhaustive list of six such investments, including private credit, real estate, and cryptocurrency. To protect retirement plan agents and managers who choose to include these riskier products in their 401(k) offerings, the proposed rule outlines six factors over 164 pages designed to define a legally required “prudent process” fiduciaries should take to vet an asset. It lists several hypothetical situations and thoroughly explains how to do the right thing in each as defined by this administration. The rule signals to fiduciaries: If you follow these step-by-step processes, our rule offers you safe harbor from litigation.
“When a plan fiduciary [follows] the described process…,” the rule reads, “its judgment regarding the factor or factors is presumed to be reasonable and is entitled to significant deference.” The DOL’s proposal “gives fiduciaries (not opportunistic trial lawyers) the discretion and flexibility.”
Trump’s DOL rule is the latest element of the president’s oft-stated goal to grow the crypto industry, signaling the administration’s desire to allow huge sums of money to flow from retirement accounts into the largely unregulated, new financial realm, experts told TPM. Looming over all crypto policy decisions, these experts warned, was the fact that they could stand to further enrich a president with unprecedented conflicts of interest related to his family’s own business ventures.
“The White House is now directly meddling in every policy, especially with regard to financial regulation like this,” Corey Frayer, director of investor protection at the Consumer Federation of America, told TPM. “And rather than making a fact-based analysis of the facts and coming to some neutral conclusion, the policies are all bent towards either serving industry or, worse, benefiting companies that Trump and his family have enormous financial interest in.”
In the first several months of his second term, Trump’s family enterprise World Liberty Financial netted more than $800 million crypto sales, according to a Reuters tally — largely through sales made to foreign countries and entities. But as with many of the administration’s pro-crypto policies, the impact is not purely personal — crypto’s administration-supported expansion throughout the U.S. economy could come at a cost to average Americans at a time when the Trump administration is dismantling consumer protection agencies and departments like the Consumer Financial Protection Bureau.
Trump’s August executive order frames more volatile alternative investments as aspirational. His pitch hinges on the idea that wealthy individuals are already reaping the rewards of the sophisticated investments ordinary retail investors have been locked out of, a sentiment that has been echoed by big wigs on Wall Street whose firms are invested in private credit and digital asset industries. The rule change also garnered support from professional advocacy groups like the American Retirement Association.
“Put simply: this rule is not about expanding access to any particular investment,” ARA CEO Brian Graff wrote in a letter explaining the group’s support of the rule. “Rather, it reinforces the protective standards that govern how plan fiduciaries make decisions by providing a roadmap for investment selection, not a mandate.”
Experts who spoke to TPM, though, said the rule removes legal protections from retirees in the event employer-sponsored retirement plan managers don’t live up to their fiduciary duties. The rule risks protecting fiduciaries who operate in their own interests rather than that of their clients, and gives a green light to investments that offer less stability, less transparency, and less protection from adverse investment results.
“The reason fiduciaries were not taking these risks with employees’ retirement savings is because the potential rewards aren’t commensurate with those risks and under the current standard they are incentivized by the threat of litigation not to make investments that aren’t in the employee’s interest,” said Frayer, who served as a senior advisor on crypto markets at the Securities and Exchange Commission during the Biden administration. “The ability of the investor to hold that fiduciary accountable has been made harder.”
To make money there’s gotta be this kind of perpetual motion machine where you’re constantly finding new people to bring into the ecosystem to offload the investments onto.
Graham Steele, academic fellow at Stanford University’s Rock Center for Corporate Governance and former Assistant Secretary for Financial Institutions at the U.S. Treasury Department
Just before the Labor Department’s announcement, the health of the private credit industry, which has historically offered higher yields in exchange for higher fees and less immediate liquidity, was beginning to come under scrutiny. Investors who were already tapped into the market initiated, over the last few months, record high withdrawals and hit withdrawal caps, prompting concerns about access to investments and limited investor pools. Cryptocurrency has long been considered a volatile, less regulated instrument susceptible to financial crimes, though some digital assets try to offer more stability and are pegged to traditional assets.
In response to questions from TPM, a Labor Department spokesperson said the department’s rule affirms a process outlined in retirement investment law and affords “maximum discretion” to fiduciaries who follow the department’s outlined process.
Trump’s August executive order used almost the exact same language employed by BlackRock CEO Larry Fink last year in his influential annual letter to investors. With one section titled “The democratization of investing,” Fink spends much of the letter arguing that capitalistic wealth creation can reach more people by diversifying retirement plan investments to include private credit and digital assets.
“The beauty of investing in private markets isn’t about owning a particular bridge, tunnel, or mid-sized company,” Fink wrote. “It’s how these assets complement your stocks and bonds — diversification.”
But Trump and Wall Street don’t actually care about expanding access to wealth, Graham Steele, former Assistant Secretary for Financial Institutions at the U.S. Treasury Department, told TPM. Instead, it’s about broadening the investor pool to inject more wealth into the pockets of sophisticated investors.
“To make money there’s gotta be this kind of perpetual motion machine where you’re constantly finding new people to bring into the ecosystem to offload the investments onto,” said Steele, who is now an academic fellow at Stanford University’s Rock Center for Corporate Governance. “The administration uses language about quote unquote democratization, but it’s really a way to prop up asset prices to benefit crypto, venture capital, and private equity in particular.”
A DOL spokesperson told TPM the rule is to provide “regulatory clarity and guidance,” not to show support for a specific industry or asset class.
“The proposed rule is asset neutral,” the spokesperson wrote in an email. “DOL provided regulatory clarity and guidance so that plan fiduciaries can evaluate all potential assets (sic) classes that may or may not be appropriate for a 401(k) plan, and provided additional factors like liquidity and valuation guidance for the diligent evaluation of more complex or potentially volatile investments.”
Steele and Frayer said the language in the DOL rule could, in fact, result in propping up certain asset classes by sending a wink and a nod from the administration to fiduciaries. Another result of that signaling, said Steele, could be to connect more exclusive assets to the mainstream market and to help protect those more volatile products from a possible future, industry-wide downturn.
“People are less sympathetic to the idea of bailing out crypto if it’s just going to make a bunch of crypto companies whole,” Steele said. “But if there’s actually working people standing behind that, there’s a more compelling case there.”
A study from JPMorganChase found fewer new investors are entering the crypto market. Retail investors who participate in the market are confident in it, a 2025 study from PriceWaterhouseCooper showed. As of 2021, only about 14% of adults in the U.S. had traded crypto as of 2021, according to the Federal Reserve Bank of San Francisco, but the incorporation of crypto assets into 401(k)s presented growth opportunities for the volatile asset class. The rate of U.S. crypto ownership remained virtually unchanged through 2024, the Pew Research Center found.
Democrats in Congress have initiated several investigations and inquiries into the president’s ties to the crypto industry and his other business interests, which they have said present exceptional conflicts of interest.
“Changing the rules to allow such risky investments into retirement accounts is deeply alarming, but it is hardly surprising,” said Sen. Richard Blumenthal (D-CT), who on March 30 sent a letter to the SEC about the Trump family’s crypto ties, said in a statement to TPM. “Americans’ savings will be in danger, but President Trump will be making millions from this risk.”
World Liberty Financial in January applied with the U.S. Office of the Comptroller of the Currency for a national bank charter under the name World Liberty Trust Company. In the application, the firm said it had attached a request “to have full fiduciary powers” in a “Confidential Business Plan” exhibit, though it’s unclear exactly what the request contained or what the implication of those powers would be. The Office of the Comptroller of the Currency did not respond to multiple requests for comment from TPM.
World Liberty Financial spokesperson David Wachsman told TPM the company’s banking charter application “is not for” the purpose of being a retirement plan fiduciary and that the charter is “unrelated” to becoming a 401(k) management or advisory company.
Still, Steele and Frayer envisioned a future where companies seeking to curry favor with the president could pump up their retirement offerings with crypto offered by World Liberty Financial.
“We already see foreign countries doing this,” said Frayer.
