US House Financial Services Committee Ranking Democrat Maxine Waters (Waters) on June 26 submitted an 11-page written comment letter to the US Department of Labor, requesting the withdrawal of a draft rule that would allow 401(k) retirement accounts to invest in cryptocurrencies and other alternative assets. The draft, proposed by the Trump administration via executive order in March, aims to expand the scope of investments eligible for 401(k) plans.
Three Core Objections in Waters' Comment Letter
(Source: US House Financial Services Committee website)
SEC's Digital Asset Investor Protection Framework Not Yet Established: Waters cites the SEC's ongoing efforts to advance digital asset protection regulations, noting that the Department of Labor allowing retirement fund investment in cryptocurrencies at this juncture conflicts with the SEC's current policy direction.
Market Has Record of Major Incidents: Waters points out that in recent years, the cryptocurrency market has experienced multiple large exchange collapses, fraud cases, and sharp price corrections. Retirement systems should prioritize asset stability over high-volatility assets.
General Investors Face Information Asymmetry: Insufficient disclosure of relevant product information may increase the difficulty of investment decisions and the risk of losses for retirement savers lacking professional financial knowledge.
Four Categories of Alternative Assets Listed in DOL Draft Rule
The draft proposed by the Trump administration via executive order in March 2026 aims to make it easier for retirement plan fiduciaries to include the following assets in 401(k) investment options:
· Digital assets (including cryptocurrencies)
· Private equity and private credit
· Real estate
· Commodities
The Department of Labor has simultaneously withdrawn its previous policy guidance requiring retirement plan fiduciaries to adopt a 'special caution' approach to cryptocurrencies.
Current Positions of Democrats and Republicans on 401(k) Crypto Investment Policy
Democrats: Argue that retirement funds should not be allowed to invest in highly volatile digital assets until the SEC's investor protection framework is more complete; the current regulatory structure does not yet provide sufficient investor safeguards.
Republicans: Argue that as long as retirement plan fiduciaries fulfill their fiduciary duties, they should retain more investment options; appropriately introducing alternative assets can help improve portfolio diversification, aligning with the development direction of modern financial markets.
Frequently Asked Questions
Does Waters' comment letter have the effect of directly withdrawing the draft?
Waters submitted a written comment during the public comment period for the DOL draft, which does not have direct legal binding effect. The Department of Labor will review all submitted comments after the comment period ends before deciding whether to revise or formally promulgate the new rule. The official deadline for public comments on the draft has not yet been announced.
Do current 401(k) regulations prohibit retirement funds from investing in cryptocurrencies?
Current regulations require retirement plan fiduciaries to bear strict fiduciary duties when allocating digital assets. The DOL's March 2026 draft aims to simplify the process for including alternative assets. As of this report, the draft has not yet taken effect, and the existing fiduciary duty standards still apply.
What exactly is the 'special caution' guidance withdrawn by the Department of Labor?
The Department of Labor had previously issued guidance requiring retirement plan fiduciaries to adopt a 'special caution' approach when considering including cryptocurrencies in investment options, and to assume additional obligations in information disclosure. This guidance has been withdrawn by the current administration, with a policy shift away from imposing additional restrictions on cryptocurrency assets.
