Us Push Sec To Open $12.5T 401K Market To Crypto

What Happened

The letter calls on the agency to recognize FINRA-certified professionals as accredited investors and to expand the scope of who qualifies for access to alternative assets within retirement plans.

The policy is intended to broaden investment choices for the more than 90 million Americans who currently participate in employer-sponsored defined contribution plans.

Lawmakers argue that allowing measured allocations into these assets could enhance net risk-adjusted returns and modernize retirement investment strategies.

The SEC is expected to play a central role in revising regulations, particularly around the accredited investor definition. Several bipartisan bills already before Congress seek to expand the criteria, including measures to recognize professional licenses, education, or SEC-administered examinations as pathways to accreditation.

The move revives initiatives first introduced during Trump’s earlier term but later rolled back under President Biden.

The order also clarifies fiduciary obligations for plan administrators who choose to include alternative assets. Regulators are expected to outline how retirement plan sponsors can provide such exposure while maintaining safeguards for investors.

The proposal would allow companies, including those in the crypto sector, greater flexibility to set reporting cadences in consultation with investors and banks.

Market Context

U.S. lawmakers are pressing the Securities and Exchange Commission (SEC) to implement President Donald Trump’s recent executive order that opens the $12.5 trillion 401(k) retirement market to alternative assets, including cryptocurrency.

Trump’s 401(k) Executive Order Puts SEC at Center of Retirement Market Overhaul

Industry groups have long lobbied for such reforms, arguing that retirement portfolios limited to stocks and bonds do not reflect the broader evolution of capital markets.

While administrative hurdles remain, the inclusion of digital assets in retirement plans could create a new channel for capital inflows into the market, bringing crypto exposure to tens of millions of Americans saving for retirement.

Atkins noted that semiannual reporting is already standard for foreign issuers trading in U.S. markets and called the adjustment “a good way forward.”

With Republicans holding a 3-1 advantage at the SEC, the proposal faces a favorable political landscape.

Why It Matters

The SEC is signaling a major policy shift, moving away from the lawsuit-driven approach of its previous administration and toward a more collaborative stance with the crypto industry and public companies.

Speaking on CNBC on September 19, SEC Chair Paul Atkins confirmed that the agency is prioritizing reforms that could loosen quarterly earnings requirements.

Details

In a letter dated September 22, House Financial Services Committee Chairman French Hill and Ranking Member Maxine Waters urged SEC Chair Paul Atkins to move swiftly in revising rules to align with the directive.

The push follows Trump’s August 7 executive order, which directs the Department of Labor to reconsider guidance under the Employee Retirement Income Security Act (ERISA).

The order specifically tasks the Labor Secretary, in coordination with the Treasury Department, the SEC, and other regulators, to clear the path for 401(k) participants to allocate part of their portfolios to private equity, real estate, digital assets, and other alternatives.

According to a White House fact sheet, total U.S. retirement assets reached $43.4 trillion as of March 31, 2025, but most savers remain restricted from accessing alternatives.

Hill and Waters urged Atkins to incorporate these legislative efforts into the agency’s rulemaking process.

For the cryptocurrency sector, the development marks a pivotal step toward mainstream adoption.

SEC Breaks With Gensler Era, Pledges Flexibility on Crypto and Corporate Disclosures

The SEC is preparing a sweeping shift in both corporate disclosure rules and its approach to crypto regulation, marking a break from years of rigid oversight.

The move follows President Donald Trump’s revived call on September 15 to replace quarterly earnings with semiannual disclosures, a change he argued would cut costs and reduce short-term pressures on executives.