U.S. House Democrat, who may soon run key committee, condemns crypto in 401(k)s

U.S. Representative Maxine Waters may soon return to the helm of the House Financial Services Committee if Democrats perform as expected in the November elections, and she's asking that the Department of Labor back away from a proposal that would encourage the managers of 401(k) retirement plans to offer alternative investments, including cryptocurrency.

In March, the Labor Department proposed a rule to implement what President Donald Trump had ordered: that people's 401(k) accounts be open to investments in private equity, private credit, real estate, commodities and digital assets. Waters filed a detailed, 11-page comment letter with the department this week, requesting that the idea be withdrawn.

"It is incoherent for the department to bless digital assets as suitable for the retirement savings of everyday Americans while the [Securities and Exchange Commission] is still building the investor-protection regime intended to make those same assets safe for ordinary investors," Waters argued in the letter. "The hazard is not confined to the volatility of individual tokens, severe as that is. It reflects a broader deterioration across the digital‑asset ecosystem, where trading activity, developer engagement, and user participation have collapsed."

Waters, who previously wielded the committee gavel when Democrats last held power, may return to chair the panel if her party wins the majority in the U.S. House of Representatives after the November congressional midterms. Kalshi betting currently has that likelihood at 82%. While that committee doesn't directly oversee the Labor Department's 401(k) policies, it does oversee the SEC, which regulates investments.

In her letter addressed to the department's acting secretary, Keith Sonderling, she said that the proposal — which hasn't yet been finalized — would expose investors to a digital assets market that "operates outside any federal framework and has produced staggering investor losses."

In August of last year, Trump issued an executive order calling for his administration to give people with government-structured retirement accounts the "opportunity to participate, either directly or through their retirement plans, in the potential growth and diversification opportunities associated with alternative asset investments."