AFT Urges Senate Rethink: Why This Crypto Market Structure Bill Demands a Second Look

The push is on. The American Financial Trust (AFT) is turning up the pressure, calling for the Senate to hit pause and seriously reconsider a proposed bill that could reshape the entire crypto landscape. This isn't just procedural noise—it's a pivotal moment for market structure.

The Core of the Controversy

At its heart, the bill aims to draw clear regulatory lines around digital assets. Proponents argue it brings necessary clarity; critics, including the AFT, warn it could stifle innovation with a one-size-fits-all approach borrowed from traditional finance. The debate cuts to the core of what crypto regulation should even look like.

Why the AFT is Sounding the Alarm

The AFT isn't just objecting—it's advocating for a framework that recognizes crypto's unique attributes. Their argument? Applying old-world securities laws to new-world digital assets is like trying to run blockchain on a dial-up connection. It misses the point and could kneecap a burgeoning sector that thrives on decentralization and speed.

The Stakes for the Market

Get this wrong, and the fallout is real. We're talking about potential chilling effects on U.S.-based exchanges, developers fleeing to friendlier jurisdictions, and a massive opportunity cost for American financial leadership. The bill's current form, according to skeptics, risks protecting outdated intermediaries more than it empowers new participants.

A Balancing Act

The Senate's challenge is monumental: craft rules that protect consumers and ensure stability without cementing the very gatekeepers crypto was built to bypass. It's a regulatory tightrope walk over a pit of legacy finance interests—some of whom, let's be cynical, probably see this as a chance to regulate their future competitors into oblivion.

The clock is ticking. The AFT's move signals that the conversation is far from over. Whether the Senate listens could determine if the U.S. builds the on-ramp to the next financial system or just another bureaucratic toll booth.

In brief

• The US teachers union warns the crypto market structure bill exposes workers and their pensions to unnecessary financial risks.
• They warn that the proposal would chip away at the long-standing securities protections that help keep retirement savings on steady ground.
• They add that the draft fails to confront fraud in the crypto space and leaves openings that could let risky products slip into pension funds.

Union Raises Alarm Over Crypto Risks to Pensions

Randi Weingarten, who heads the AFT, delivered a letter on Monday outlining the union’s position. In her view, the proposed bill fails to provide the kind of oversight and protections that many stakeholders have been seeking. She warned that the framework “exposes working families— families with no current involvement in 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 the limited safeguards currently in place while also weakening long-standing rules for traditional securities. They cautioned that passing the measure in its current form could undermine the stability of multiple asset classes and put retirement portfolios under strain.

AFT members throughout the country rely on their pensions—their deferred wages. These retirement plans must have funds that are shielded from fraud and unethical practices. This bill fails to provide a regulatory structure for crypto assets and stablecoin that is equivalent to that for other pension holdings.

Concerns Over Investor Protections and Retirement Funds

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

• They fear the bill could let companies move shares onto blockchain-based systems, allowing digital assets to bypass investor protections such as disclosures, intermediary oversight, and standard reporting rules.
• The union warned that combining these gaps 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 they were invested in conventional securities.

Weingarten went on to explain that the draft does little to confront the fraud, misconduct, and other illicit behavior that still shows up across many crypto markets. She called the approach reckless and cautioned that it could set the stage for a future financial crisis.

She added, “as a labor union, we are fundamentally committed to strong, SAFE pensions that are there for workers in their retirement; because of this we oppose this bill and urge you to do the same.”  

Clarifying Rules and Oversight in the Crypto Sector

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

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

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