The second-largest teachers union in the United States has urged the Senate to reconsider a crypto bill that it says puts the pensions of 1.8 million members at risk, while doing little to combat fraud and corruption in the digital assets sector.
In a Dec. 8 letter obtained by CNBC, Randi Weingarten, president of the American Federation of Teachers (AFT), addressed the U.S. Senate Banking Committee about the Responsible Financial Innovation Act, saying, “it poses profound risks to working families’ retirements and the overall stability of the economy.”
The proposal, which builds on a measure passed by the House earlier this year, is co-sponsored by crypto allies Sen. Cynthia Lummis and Sen. Bernie Moreno, as well as Senate Banking Committee Chairman Tim Scott. While the bill establishes a framework for oversight of digital assets, it also raises new questions about how tokenized securities, instruments that are not strictly cryptocurrencies, would be treated by regulators.
“The crypto legislation we have seen considered by committee over the past few months deeply concerns us,” Weingarten wrote. “This is both irresponsible and reckless. We believe that if passed, this bill could potentially lay the groundwork for the next financial crisis.
“Beyond the threat to the retirement security of working families, the legislation considered by the committee does little to combat the illegal activities, fraud, and corruption that continue to be prevalent in anonymous crypto markets,” he wrote.
In October, the AFL-CIO, the largest union in the United States, declared its opposition to the Senate Banking Committee regarding a crypto bill.
“The Responsible Financial Innovation Act does not protect consumers, workers, or the financial system and instead exposes everyone to more risk,” AFL-CIO Government Affairs Director Jody Calemine said in the letter to the Senate Banking Committee. “Passage of this legislation will allow the proliferation of assets that investors will wrongly view as safe.”
In July, Lummis said: “This draft discussion represents a thoughtful and balanced approach that will provide the clarity our innovators need while still providing strong consumer protections.
Also a member of the Banking Committee discussing the bill, Sen. Bill Hagerty acknowledged that the bill provides consumers with safeguards that Americans have long awaited.
In August, the Institute of Internal Auditors also wrote a letter expressing concerns, but in this case, regarding crypto exchanges: “The IIA believes that the bill does not adequately address the critical need for good governance and risk management processes when trading digital assets. »
