Maxine Waters, the senior Democrat on the House Financial Services Committee, has urged the Department of Labor to withdraw its proposal on alternative investments.
Waters, who could soon return as chair if Democrats win the November elections, is pushing back against a plan that would allow 401(k) retirement accounts to include alternative assets such as cryptocurrencies.
The Labor Department introduced the proposal in March, following an executive order from President Donald Trump to expand 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 scrapped.
She argued that approving digital assets for retirement savings is premature while the Securities and Exchange Commission is still developing investor protection rules. Waters stressed that the risks go beyond crypto price volatility, highlighting broader concerns such as declining trading activity, lower developer engagement, and reduced user participation across the digital asset space.
Waters, who previously led the committee, could reclaim the position if Democrats take control of the House. Current predictions from Kalshi place those chances at around 82%. While the committee does not directly control 401(k) policies, it oversees the SEC, which regulates financial markets.
In her letter to Acting Labor Secretary Keith Sonderling, Waters warned that the proposal could expose retirement savers to a largely unregulated market that has already resulted in significant investor losses.
The proposal follows Trump’s executive order issued last August, which aimed to give individuals with government-backed retirement plans access to alternative investments for potential growth and diversification.
