The American Federation of Teachers (AFT) has called on Senate leaders to reject the Responsible Financial Innovation Act, expressing concerns that it would compromise investor protections and introduce new risks to pension funds. The union argues that the legislation would undermine traditional securities safeguards and allow tokenized stocks to trade without adhering to standard registration or reporting requirements. This warning comes at a time when discussions around the crypto market structure bill have become increasingly contentious, with industry groups divided and lawmakers indicating that the bill's chances of advancing have diminished.
Randi Weingarten, the AFT President, emphasized in a letter that the proposed legislation could strip away existing protections for crypto assets and erode longstanding securities regulations. He warned that it would permit companies to issue stock on a blockchain without following federal registration and reporting standards. The AFT, a major U.S. labor union with approximately 1.7 million members, including teachers, school staff, and public sector workers, is concerned that the bill would expose families uninvolved with cryptocurrency to economic risks and threaten the stability of their retirement security.
The Responsible Financial Innovation Act aims to establish a comprehensive framework for the regulation of digital assets, determining the roles of the Commodity Futures Trading Commission and the Securities and Exchange Commission. It proposes federal standards for the operations of exchanges, brokers, custodians, and token issuers, focusing on registration, disclosures, consumer protection, and the management of customer assets. Current discussions are exploring how the bill could introduce new compliance obligations for issuers and intermediaries, potentially allowing tokenized traditional financial instruments to trade under updated federal regulations.
The debate over the bill is taking place amidst a contentious policy landscape, with disagreements among crypto stakeholders about the necessity and content of a market structure bill. During the Blockchain Association’s annual policy summit in Washington, D.C., it became evident that once-unified groups are now divided over critical issues such as the treatment of decentralized finance, government oversight of peer-to-peer transactions, and acceptable compromises for legislative progress. Some stakeholders have retracted their support, preferring no bill over one they find unacceptable.
At the summit, Decrypt reported a growing divide between the optimistic public discourse and private concerns about the bill’s future. Despite expressing enthusiasm publicly, Senator Cory Booker shared significant concerns in private about the potential derailment of the bill. Negotiators from both political parties remain hopeful about revising the draft soon, but Booker highlighted that recent developments, including the Supreme Court's potential decision allowing President Trump to dismiss SEC and CFTC commissioners, have complicated the bill's prospects. This expansion of presidential power, Booker suggested, could jeopardize the bill, especially with a lack of Democratic representatives in these agencies.
The Supreme Court is also reviewing President Trump's prior decision to dismiss Rebecca Slaughter, a Democratic FTC commissioner, whose husband is involved in promoting the bill with a crypto investment firm. As the Court prepares to hear Slaughter’s case against Trump, the future of the crypto market structure bill hangs in the balance. Decrypt has sought comments from various stakeholders, including the White House, the SEC, the CFTC, the AFT, and the Department of Justice.