The American Federation of Teachers Raises Concerns
The American Federation of Teachers (AFT), a major labor organization representing around 1.7 million members including educators, healthcare professionals, and public service workers, has raised alarms over a proposed cryptocurrency market structure bill in the Senate. In a letter issued on Monday, AFT President Randi Weingarten firmly requested Senate leaders to abandon the Responsible Financial Innovation Act, asserting that it could jeopardize the pension funds of working families by exposing them to high-risk investments and potential fraud.
Criticism of the Proposed Bill
Weingarten criticized the bill for rolling back essential safeguards that currently exist for cryptocurrency investments, which she asserts would simultaneously weaken protections for traditional securities. The legislation aims to clarify the oversight of digital assets, delineating which will fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Additionally, it seeks to establish a standardized federal framework governing the operations of exchanges, brokers, custodians, and token issuers, covering aspects such as registration and consumer protection.
Potential Harms and Economic Risks
However, Weingarten emphasized the potential harms posed by the bill, stating it could risk the financial security of families who are not even part of the cryptocurrency landscape.
“Rather than providing desperately needed regulation and commonsense guardrails, this bill exposes working families to economic risk and threatens the stability of their retirement security,”
she argued.
Divisions Among Blockchain Advocates
As the Senate prepares to engage in further discussions regarding this contentious bill, divisions among blockchain advocates have surfaced during a recent policy summit held by the Blockchain Association in Washington, D.C. Stakeholders that once collaborated closely are now divided over critical issues such as the treatment of decentralized finance (DeFi), governmental oversight of peer-to-peer transactions, and the acceptability of various compromises necessary to pass legislation.
While some representatives are advocating for complete withdrawal of support for the bill rather than settling for unfavorable terms, participation at the summit revealed a contrast between the public optimism expressed by some senators and private concerns from others.
Concerns from Senator Cory Booker
Senator Cory Booker (D-NJ), one of the key Democratic negotiators, expressed apprehension regarding the bill’s future following news that the Supreme Court might soon empower President Trump to dismiss commissioners of the SEC and CFTC at his discretion.
“This raises significant concerns,”
Booker commented, citing fears that it could lead to a troubling expansion of executive power, reminiscent of previous actions benefiting Trump’s associates in questionable ways.
With no Democratic appointees currently occupying positions on either regulatory board and none anticipated to join before January, the lack of minority representation could significantly hinder the progress of a bill dependent on these regulators. This week, the Supreme Court is scheduled to deliberate on a case concerning the legality of Trump’s decision to terminate Rebecca Slaughter, a former Democratic commissioner of the Federal Trade Commission (FTC), who has been advocating for the legislation alongside crypto investment firm Paradigm.
Conclusion
Decrypt has reached out to various governmental departments, including the White House, SEC, CFTC, AFT, and the DOJ, seeking commentary on this unfolding situation.
