AFT Warns Senate: New Crypto Bill Puts Pensions and 401(k)s at ’Serious Risk’
Your retirement fund might be gambling with digital dice.
The American Federation of Teachers just fired a warning shot across the Senate's bow. Their message? A proposed crypto bill could turn the bedrock of American retirement—pensions and 401(k)s—into a high-stakes experiment.
The Core Conflict: Innovation vs. Prudence
Proponents argue the legislation unlocks innovation, letting traditional finance finally tap into blockchain's potential. The AFT sees a different picture: a regulatory green light for exposing trillions in worker savings to an asset class famous for its volatility and, let's be honest, its occasional rug pulls.
It's a classic Wall Street move—repackaging speculative risk as a 'diversification opportunity' for the little guy. Because nothing says 'secure retirement' like your nest egg mooning one day and cratering the next on a tweet from a tech billionaire.
Why This Warning Matters Now
The timing isn't random. As digital assets push further into the mainstream, the fight over who gets to manage them—and with what safeguards—is heating up. The bill in question could dramatically lower the guardrails for retirement plan managers wanting to allocate to crypto.
The AFT's stance is a stark reminder: for millions, this isn't about trading memecoins for fun. It's about the money they'll need to survive in thirty years.
The Bottom Line
Lawmakers now face a brutal calculus. Do they prioritize market freedom and technological progress, or the fiduciary duty to protect lifetime savings from untested volatility? The AFT has drawn its line in the sand, framing the debate not as anti-crypto, but pro-prudence. The Senate's next move will reveal who they think should bear the risk—institutional portfolios, or your grandmother's pension.
AFT targets tokenized stocks and retirement exposure
Randi’s main objection centered on a section of the bill that WOULD allow non-crypto companies to place their stock on blockchains while avoiding current securities laws. She said that the move alone could poison pension funds with unsafe assets.
“This loophole and the erosion of traditional securities law will have disastrous consequences: Pensions and 401(k) plans will end up having unsafe assets even if they were invested in traditional securities,” she wrote.
The issue ties directly to tokenization, the process of turning regular financial assets into blockchain-based tokens.
The idea has picked up strong backing from major Wall Street leaders, including Larry Fink, chief executive of BlackRock, the world’s largest asset manager.
While tokenization is being marketed as the future of finance, AFT warned that the bill would apply the weakest rules to those assets and leave retirement money exposed.
Randi also said the bill does little to stop crime in crypto markets. She pointed to ongoing fraud, illegal activity, and corruption as problems that the proposal does not solve. She again called the plan reckless and said, “We believe that if enacted, this bill has the potential to lay the groundwork for the next financial crisis.”
The AFT is not alone. In October, the AFL-CIO, the nation’s largest labor union, also sent its objection to the Senate Banking Committee over a draft version of the same bill. Opposition has grown as the bill has moved closer to a full Senate debate.
Democrats push back as crypto bill hunts for votes
The bill is being co-sponsored by Cynthia Lummis (R-Wyoming), Bernie Moreno (R-Ohio), and Tim Scott. It is built on top of legislation that already passed the U.S. House of Representatives over the summer.
The goal is to create a framework for regulating crypto, but it also raises major questions about how tokenized stocks should be treated.
Tokenization remains one of the biggest hurdles to Democratic support. Senate backers still need at least seven Democratic votes for the bill to pass.
At last week’s CNBC CFO Council Summit in Washington, D.C., Mark Warner (D-Va.) told attendees, “I’m in crypto hell at this moment trying to get the market structure bill done.”
Mark later joined other Democratic senators on Monday to review the draft and look at counteroffers, as reported by Politico.
Democrats, including Elizabeth Warren, have also been fighting over who should control crypto oversight between the Commodity Futures Trading Commission and the Securities and Exchange Commission. At the same time, states are raising alarms that a new federal law could wipe out their ability to protect residents.
William Galvin, Secretary of State for Massachusetts, warned in a letter that the bill’s “sweeping provisions” could block state oversight and leave millions of savers exposed to fraud.
Progress on the Senate version of the bill was delayed for weeks due to the longest government shutdown in U.S. history. But momentum is returning.
Speaking Tuesday morning at the Blockchain Association Policy Summit in Washington, D.C., Cynthia Lummis said her goal is to release a new draft by the end of the week.
She said the crypto industry, along with Republicans and Democrats, would review it before moving to markup next week.
At the same time, pressure is building from the banking sector. The CEOs of Bank of America, Citi, and Wells Fargo are scheduled to meet with lawmakers on Thursday to discuss how the crypto market structure plan could change the financial system.
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