AFT pushes Senate to review crypto market structure bill

A long-standing division persists over the proposed cryptocurrency market structure bill. Supporters argue the measure could bring order to an industry that is evolving at breakneck speed, while critics warn it could introduce new risks instead of reducing them. The American Federation of Teachers has become one of the most vocal opponents, urging the U.S. Senate to shelve the legislation. The union said the proposal poses serious dangers for pensions and the U.S. financial system as a whole.

The union sounds the alarm on crypto risks for pensions

Randi Weingarten, who heads the AFT, delivered a letter Monday outlining the union's position. In his view, the proposed bill does not provide the type of oversight and protections that many stakeholders are seeking. She warned that the framework “Exposes working families, families with no current involvement or connection to cryptocurrency, to economic risk and threatens the stability of their retirement security. »

Building on these concerns, the letter explained that the bill does more than leave crypto assets without clear protections. The union argued that the bill removes limited protections currently in place while also weakening long-standing rules for traditional securities. They warned that adopting the measure in its current form could harm the stability of several asset classes and put retirement portfolios under pressure.

AFT members across the country are counting on their pensions — their deferred wages. These retirement plans must have funds protected from fraud and unethical practices. This bill does not provide a regulatory structure for crypto assets and stablecoins equivalent to that for other retirement assets.

Concerns over investor protection and pensions

Representing around 1.8 million members, the union highlighted several other key concerns about the proposal;

• They fear the bill could allow companies to move shares onto blockchain-based systems, letting digital assets bypass investor protections such as disclosures, intermediary supervision and standard reporting rules.
• The union warned that combining these loopholes with the weakening of existing securities rules could create serious risks across the financial system.
• As a result, retirement plans such as pensions and 401(k)s could end up holding unsafe assets, even when invested in conventional securities.

Weingarten went on to explain that the project does little to combat the fraud, misconduct, and other illicit behavior that continues to appear in many cryptocurrency markets. She called the approach irresponsible and warned it could set the stage for a future financial crisis.

She added, “As a union, we are fundamentally committed to strong, secure pensions that are there for workers when they retire; This is why we oppose this bill and urge you to do the same. »

Clarification of rules and supervision of the crypto sector

Additionally, the Responsible Financial Innovation Act, a bipartisan effort created in 2022, aims to establish clearer rules for the cryptocurrency sector. This year, the Senate Banking Committee released a revised discussion draft, showing how lawmakers plan to update supervision and regulation in this rapidly evolving area.

The revised legislation builds on this effort by defining key concepts, including payments-focused crypto assets and stablecoins, and clarifying how oversight responsibilities would be shared between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The aim is to provide clearer rules and reduce uncertainty in a sector that has long operated under fragmented regulations.