AFT Warns Senate: Crypto Bill Puts Pensions at Risk and Threatens Economic Stability

TLDR:

• AFT warns crypto bill could jeopardize workers’ pensions and savings.
• Senate crypto bill criticized for bypassing key securities regulations.
• AFT calls crypto market bill “reckless,” warns of fraud risks.
• Pension funds could be exposed to unsafe crypto assets, AFT says.
• Labor unions oppose crypto bill, fearing it could cause another financial crisis.

The American Federation of Teachers (AFT) has strongly opposed the Senate’s proposed crypto market structure bill, warning that it jeopardizes workers’ pensions and the overall stability of the U.S. economy. The union, which represents over 1.7 million members, has raised concerns about the bill’s potential to expose pension funds to unsafe digital assets and crypto-related fraud. The bill, which aims to regulate the growing digital assets market, could undermine existing financial protections, the AFT argues.

Concerns Over Retirement Security and Fraud Risk

In a letter to Senate leaders, AFT President Randi Weingarten expressed alarm about the crypto market structure bill, calling it a “reckless” proposal. The bill could allow companies to tokenize their stock on blockchain platforms, bypassing essential regulations for securities, according to the union. “This loophole will expose pensions and 401(k) plans to dangerous assets,” Weingarten stated, highlighting how it could lead to severe economic risks for American workers.

The union believes that this legislation could strip away the few protections currently in place for digital assets, making it easier for fraudulent activities to flourish in the crypto market. Despite the bill’s goal to create a clearer regulatory framework, AFT warns that it would fail to protect working families from unsafe investments. As a result, the bill could potentially set the stage for another financial crisis, damaging the retirement security of millions.

Potential Erosion of Traditional Securities Laws

The AFT also raised concerns about the erosion of traditional securities laws if the crypto market structure bill is passed. The legislation would allow non-crypto companies to list their stocks on blockchain networks without adhering to established securities laws. This could bypass critical registration, reporting, and regulatory oversight, which would significantly weaken investor protections.

Weingarten stressed that this would have disastrous consequences for long-term investment vehicles like pensions. “Pension funds could end up investing in unsafe crypto assets while believing they are purchasing traditional securities,” she warned. With these concerns in mind, the AFT urges the Senate to reconsider the bill to safeguard the future of retirement savings for American workers.

Crypto Bill Faces Growing Opposition from Key Stakeholders

The Responsible Financial Innovation Act, introduced by Senators Cynthia Lummis and Kirsten Gillibrand, has garnered significant attention and opposition. While the bill aims to establish regulatory guidelines for digital assets, it has faced criticism from various groups, including labor unions and lawmakers. Critics argue that it gives too much power to digital asset firms and creates significant gaps in fraud prevention.

The debate surrounding the crypto market structure bill continues to heat up, with key players on both sides of the aisle pushing for revisions. As the Senate works toward finalizing the bill, the AFT and other unions are calling for stronger safeguards to protect workers and retirees from the volatile and unregulated nature of cryptocurrencies. The bill’s progress will depend on finding common ground between lawmakers and various interest groups in the coming weeks.

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