WASHINGTON, D.C.—A proposed Department of Labor rule would put ordinary people's retirement security at risk by loosening investor standards and establishing a so-called “safe harbor” for retirement plan managers (ERISA plan fiduciaries) to invest in volatile digital assets, a decision tainted by the president’s deep financial ties to the crypto industry, Democracy Defenders Fund said today.

In a formal comment filed with the Employee Benefits Security Administration, a DOL agency, DDF outlined how the proposed rule on "Fiduciary Duties in Selecting Designated Investment Alternatives" is deeply flawed.

The administration's push to make it easier for money managers to invest in digital assets comes as the president and his family's wealth related to digital assets continues to grow. President Trump has nearly $2 billion tied to equity and revenue relationships with digital asset industry companies like World Liberty Financial, Inc. and Trump Media and Technology Group.

"The administration's attempt to make it easier for retirement plan advisors to steer their clients toward investments in digital assets places the president’s financial interests above those of everyday Americans," said Virginia Canter, chief counsel and director of ethics and anti-corruption at DDF. "President Trump stands to benefit if ordinary people can use their employer-sponsored retirement plans to invest in crypto. The administration claims the proposed rule would 'relieve regulatory burdens,' but it looks more like self-dealing."

EBSA acknowledged that digital asset companies stand to gain from the rule, and that even a 1% allocation from a large retirement plan could translate into "millions of dollars flowing into crypto funds or tokens."

DDF's comment explains how the Trump administration has stripped EBSA of its independence and ability to act on behalf of the public. "This is not simply a situation in which the purity of reason has been distorted by politically derived value judgments," the comment states. "This is the rare case in which the president has structured the decision-making process in such a way that the EBSA is objectively not free to consider the ultimate merits of the issue."

The proposed rule is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" under the Administrative Procedure Act, the comment states.

"American retirees should not have their life savings put at risk to line the pockets of any president, let alone one who has already grown his crypto-related wealth by nearly $2 billion since he won the election," said Chris Swartz, senior counsel for ethics and anti-corruption at DDF.

Read a fact sheet about the proposed rule here.
Read DDF’s comment here.

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Democracy Defenders Fund brings together a nonpartisan team to work with national, state and local allies across the country to defend in real-time the foundations of our democracy.