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

Maxine Waters, the ranking Democrat on the House Financial Services Committee, urged the Department of Labor on March 14, 2024, to withdraw its proposed rule that would allow cryptocurrency investments in 401(k) retirement plans. Waters expressed significant concerns about the volatility and speculative nature of digital assets, stating that they pose a substantial risk to the retirement savings of American workers. She specifically cited the potential for significant losses due to the inherent risks associated with cryptocurrencies. In a letter to Secretary of Labor Julie Su, Waters emphasized that the department's fiduciary duty is to protect plan participants and beneficiaries, a duty she believes would be compromised by allowing such investments. She highlighted the lack of regulatory clarity and the potential for fraud and manipulation within the cryptocurrency market as further reasons for caution. Waters requested that the Department of Labor conduct a more thorough risk assessment and consider the long-term implications before proceeding with any such policy changes. The proposed rule, which was published in March 2023, aimed to provide a framework for fiduciaries to consider alternative assets, including digital assets, for plan investments.