Key House Figure Criticizes Crypto’s Role in 401(k) Plans

Maxine Waters, the ranking Democrat on the House Financial Services Committee, has urged the Department of Labor to abandon its proposal to expand access to alternative investments.

Waters, who could soon retake the committee’s leadership if Democrats win the November elections, is opposing a plan that would allow 401(k) retirement accounts to include assets such as cryptocurrencies.

The proposal, unveiled in March, stems from an executive order by President Donald Trump aimed at broadening retirement investment options to include private equity, private credit, real estate, commodities, and digital assets. In response, Waters submitted an 11-page letter this week calling for the proposal to be withdrawn.

She argued that it is premature to approve digital assets for retirement portfolios while the Securities and Exchange Commission is still developing safeguards for investors. Waters warned that the risks go beyond the volatility of crypto prices, citing deeper issues within the sector, including declining trading volumes, reduced developer activity, and falling user participation.

Waters, who previously chaired the committee, could regain the role if Democrats secure a House majority. Kalshi data currently places the odds of that outcome at 82%. Although the committee does not directly oversee 401(k) policies, it supervises the SEC, which regulates financial markets.

In her letter to Acting Labor Secretary Keith Sonderling, Waters cautioned that the proposal could expose retirement savers to a largely unregulated market that has already led to significant investor losses.

The initiative follows Trump’s executive order issued last August, directing agencies to provide individuals with access to alternative investments through their retirement plans to enhance growth and diversification opportunities.