Waters, Potential House Chair, Asks Labor Dept to Kill Crypto 401(k) Rule

Representative Maxine Waters, the House Democrat who may chair the Financial Services Committee if her party retakes the chamber in November, asked the Labor Department this week to withdraw a proposal that would let 401(k) plans invest in crypto and other alternative assets.

Waters filed an 11-page comment letter to acting Labor Secretary Keith Sonderling. She argued that the proposal would expose retirement savers to a digital-asset market that lacks federal oversight and has generated severe losses. "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," she wrote.

The hazard, she said, is not limited to token volatility. "It reflects a broader deterioration across the digital-asset ecosystem, where trading activity, developer engagement, and user participation have collapsed."

The Labor Department issued the proposal in March to implement an executive order Trump signed in August 2024. That order called for giving workers with government-structured retirement accounts the "opportunity to participate in the potential growth and diversification opportunities associated with alternative asset investments." The rule has not been finalized. Waters' letter requests that it be withdrawn entirely.

In her letter, Waters said the digital-asset market "operates outside any federal framework and has produced staggering investor losses." She argued that the SEC is still building the rules needed to protect ordinary investors from those risks.