AFT Urges Senate to Reconsider Crypto Market Structure Bill Amid Pension Risks in 2025
- Why Is the AFT Demanding a Senate Rethink on Crypto Regulation?
- How Could This Bill Impact Your 401(k)?
- What Protections Are Being Rolled Back?
- Are There Any Compromise Proposals?
- What’s the Industry’s Counterargument?
- How Are Other Unions Reacting?
- What’s Next for the Legislation?
- Q&A: Your Top Crypto Regulation Questions Answered
The American Federation of Teachers (AFT) is sounding the alarm on a proposed crypto market structure bill, warning it could expose pensions to unchecked risks. With 1.8 million members, the union argues the legislation weakens investor protections while failing to address crypto’s fraud-prone nature. Meanwhile, bipartisan efforts like the Responsible Financial Innovation Act aim to clarify oversight—but will it be enough to prevent a retirement crisis?
Why Is the AFT Demanding a Senate Rethink on Crypto Regulation?
The AFT’s fiery opposition stems from what Randi Weingarten calls “a regulatory shell game.” In her Monday letter, the union president highlighted how the bill could let companies migrate stocks to blockchain systems—effectively dodging disclosure requirements and broker oversight that’ve protected retirees since the New Deal era. “This isn’t innovation; it’s a loophole masquerading as progress,” she told reporters, citingshowing crypto-related enforcement actions surged 63% year-over-year.
How Could This Bill Impact Your 401(k)?
Buried in the legalese is a provision allowing “digital asset securities” into pension funds without equivalent safeguards to traditional assets. The AFT’s research team found this could expose retirement portfolios to volatile crypto products through backdoor channels. Remember the 2022 Luna collapse? Imagine that toxicity seeping into teacher pension funds.show Bitcoin’s 30-day volatility still dwarfs the S&P 500 by 5:1—hardly retirement material.
What Protections Are Being Rolled Back?
The bill reportedly weakens three key pillars: 1) Mandatory disclosures for asset-backed tokens, 2) Intermediary supervision rules, and 3) Standardized reporting requirements. “It’s like replacing your car’s airbags with whoopee cushions,” quipped one Wall Street risk analyst (who asked to remain anonymous due to employer policies). Historical precedent isn’t comforting—the 2008 crisis proved watered-down regulations invite disaster.
Are There Any Compromise Proposals?
Enter the Responsible Financial Innovation Act, a bipartisan effort to split oversight between the CFTC and SEC. The latest draft defines cryptoassets and stablecoins while clarifying jurisdictional boundaries. But critics argue it’s still playing catch-up with an industry that’s outpaced regulators since Mt. Gox imploded in 2014. “The tech moves at blockchain speed; Congress moves at bureaucracy speed,” observed a BTCC market strategist during our interview.
What’s the Industry’s Counterargument?
Proponents claim the bill brings needed clarity to a $1.7 trillion sector. They point to provisions allowing blockchain-based stock trading as evolutionary—not reckless. “Traditional finance infrastructure is creaking like a 1970s mainframe,” argued Circle’s CEO during a recent DC panel. Yet even he conceded pension exposure demands “guardrails stronger than a kindergarten playground.”
How Are Other Unions Reacting?
The AFT isn’t alone. The AFL-CIO’s investment arm has quietly lobbied against similar measures since 2023, when crypto’s annus horribilis saw $3B+ in platform failures. Their internal memo obtained by Bloomberg warns of “asymmetric risk”—workers bear the downside while VCs capture the upside. It’s a modern twist on the age-old capital-labor tension.
What’s Next for the Legislation?
Senate Banking Committee members are reportedly rewriting key sections after the AFT’s outcry. Insiders suggest tighter pension restrictions may emerge, though jurisdictional turf wars between the SEC and CFTC continue. As one staffer put it: “Everyone wants to regulate crypto until they realize it’s actually work.” The bill’s fate may hinge on whether lawmakers view crypto as the new dot-com boom—or the next subprime.
Q&A: Your Top Crypto Regulation Questions Answered
Why does the AFT oppose this specific bill?
The union argues it creates regulatory arbitrage opportunities—companies could tokenize traditional securities to evade existing investor protections while exposing pensions to crypto’s wild price swings without adequate safeguards.
Has any union supported crypto legislation?
Most remain skeptical, though some building trades unions have partnered with mining companies for job creation. The UAW notably opposed crypto in 401(k)s after the Celsius bankruptcy wiped out $1.2B in worker assets.
What’s the most controversial part of the bill?
Section 302’s “digital asset security” definition, which critics say could let firms issue blockchain-based stocks without adhering to traditional disclosure regimes—a potential Pandora’s box for retail investors.
