The U.S. Department of Labor has unveiled a new regulation aimed at making it more challenging to take legal action against retirement plan fiduciaries that invest in high-risk, volatile assets. This initiative also aligns with President Donald Trump’s administration and its ongoing support for the cryptocurrency sector, a favorite of the Trump family.
Referring to Trump’s August 2025 executive order titled “Democratizing Access to Alternative Assets,” the proposed regulation lists six types of investments, such as private credit, real estate, and cryptocurrency. To safeguard retirement plan professionals who decide to incorporate these riskier options into their 401(k) plans, this 164-page rule outlines a series of factors that define a “prudent process” for fiduciaries when evaluating potential investments. It details various hypothetical scenarios and elucidates the steps fiduciaries should take, as endorsed by this administration. The message is clear: by adhering to these guidelines, fiduciaries can shield themselves from litigation.
The rule asserts that “when a plan fiduciary [adheres to] the specified process… their judgment regarding the relevant factors is presumed reasonable and receives substantial deference.” The proposal emphasizes that it is the fiduciaries, not opportunistic lawyers, who will have the flexibility to navigate these guidelines.
This initiative represents a continuation of Trump’s goal to expand the cryptocurrency sector, indicating a desire to redirect substantial funds from retirement accounts into this largely unregulated financial domain, as noted by experts. They caution that this could further enrich a president with unusual conflicts of interest tied to his family’s business endeavors.
“The White House is increasingly involved in shaping policy, particularly concerning financial regulations like this one,” Corey Frayer, director of investor protection at the Consumer Federation of America, told TPM. “Instead of a fact-based analysis leading to impartial conclusions, the policies seem skewed toward benefiting either the industry or companies in which Trump and his family have significant financial stakes.”
During the initial months of his second term, Trump’s family business, World Liberty Financial, reportedly generated over $800 million through crypto sales, primarily targeting foreign entities. However, the ramifications of the administration’s pro-crypto policies extend beyond personal gain, potentially risking the financial stability of ordinary Americans as the Trump administration is also reducing consumer protection agencies.
The August executive order framed riskier investments as aspirational. It suggests that affluent individuals are already capitalizing on intricate investment strategies that ordinary investors have limited access to—a sentiment echoed by powerful figures on Wall Street involved in private credit and digital asset sectors. The rule change also gained backing from organizations like the American Retirement Association.
“Essentially, this rule does not aim to expand access to specific investments,” wrote ARA CEO Brian Graff in a letter of support. “Rather, it reinforces the standards that govern fiduciary decisions by offering a roadmap for investment selection, not a mandate.”
Experts who spoke to TPM, however, argued that the rule diminishes legal safeguards for retirees in cases where plan managers fail in their fiduciary duties. It potentially encourages fiduciaries to act in their interests rather than their clients’, endorsing investments that promise lower stability, transparency, and protection against negative outcomes.
“Fiduciaries avoided high-risk assets with employees’ retirement savings primarily because the risks outweigh the potential rewards and current regulations deter investments not aligned with employees’ interests due to the threat of litigation,” explained Frayer, who previously advised on crypto markets at the SEC during the Biden administration. “This new regulation complicates the ability for investors to hold fiduciaries accountable.”
To profit, there has to be a continuous cycle of bringing in new investors to offload those investments.
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
Prior to the Labor Department’s announcement, the private credit sector, known for offering higher yields with elevated fees and delayed liquidity, was facing scrutiny. Investors had begun withdrawing record amounts from the market, raising alarms about access to investments and restricted investor pools. Cryptocurrency has always been regarded as a volatile and less-regulated asset prone to financial malpractice, although some digital currencies aim for greater stability by being linked to traditional assets.
In response to queries from TPM, a Labor Department representative affirmed that the new rule upholds practices established in retirement investment laws while granting maximum flexibility to those fiduciaries who adhere to the outlined procedures.
Trump’s executive order mirrored language utilized by BlackRock CEO Larry Fink in his influential annual investor letter last year. In a section titled “The Democratization of Investing,” Fink argues that expanding access to alternative investments could promote capitalistic wealth creation among a wider population.
“The appeal of investing in private markets isn’t about acquiring specific assets like a bridge or a mid-sized business,” Fink noted. “It’s about how these investments enhance your existing portfolio—diversification.”
However, Graham Steele, former Assistant Secretary for Financial Institutions at the U.S. Treasury Department, told TPM that neither Trump nor Wall Street is genuinely focused on widening access to wealth. Instead, the goal seems to be expanding the investor base to funnel more profits into the hands of seasoned investors.
“To generate profits, there’s this ongoing need to find new participants to absorb those investments,” said Steele, an academic fellow at Stanford University’s Rock Center for Corporate Governance. “The administration’s rhetoric about democratization is merely a means to elevate asset prices, especially benefiting crypto, venture capital, and private equity.”
A DOL spokesperson emphasized to TPM that the rule aims to deliver “regulatory clarity and guidance,” rather than advocating for a specific asset class or industry.
“The proposed regulation is asset-neutral,” the spokesperson stated. “The DOL provided guidance for evaluators considering a broad spectrum of potential asset classes suitable for a 401(k) plan, enhancing factors like liquidity and valuation for assessing complex or volatile investments.”
Steele and Frayer noted that the semantics in the DOL rule might inadvertently endorse certain asset classes, signaling toward fiduciaries to gravitate toward more exclusive investments, thereby cushioning those products against potential downturns.
“Public sympathy wanes when the conversation shifts to bailing out crypto enterprises. However, if regular workers are tied into the situation, the narrative changes,” Steele pointed out.
A JPMorganChase study found that fresh entrants to the crypto market have dwindled. Despite retail investors’ confidence in the market, as highlighted in a 2025 survey by PriceWaterhouseCooper, participation remains low—approximately 14% of U.S. adults had engaged in crypto trading as of 2021, according to the Federal Reserve Bank of San Francisco. The inclusion of crypto assets in 401(k)s presents potential growth avenues for this unpredictable asset class, yet ownership levels remained static through 2024, as indicated by the Pew Research Center.
Democratic lawmakers have initiated various investigations into the president’s connections with the cryptocurrency industry and his broader business interests, citing significant potential conflicts of interest.
“Altering regulations to permit risky investments in retirement accounts is deeply concerning, albeit hardly surprising,” remarked Sen. Richard Blumenthal (D-CT), who on March 30 dispatched a letter to the SEC regarding the Trump family’s crypto affiliations. “The savings of Americans are at risk, while President Trump stands to gain millions from this gamble.”
In January, World Liberty Financial submitted an application to the U.S. Office of the Comptroller of the Currency for a national bank charter under the name World Liberty Trust Company. Their application included a request for “full fiduciary powers” in a “Confidential Business Plan,” though specifics about that request remain unclear. The Office of the Comptroller of the Currency has not responded to multiple inquiries from TPM.
A representative for World Liberty Financial, David Wachsman, asserted to TPM that the firm’s banking charter application is “not for” the purpose of acting as a retirement plan fiduciary, indicating it is “unrelated” to managing or advising 401(k) plans.
Nevertheless, both Steele and Frayer foresee a future where companies seeking to please the administration may enhance their retirement offerings with crypto products from World Liberty Financial.
“We’re already witnessing this approach from foreign nations,” Frayer added.