America’s Leading Teachers’ Union Gives Crypto Warning Related To Pensions

The American Federation of Teachers (AFT) sent a letter to Senate Banking Committee leaders warning that proposed changes to the legislative framework would legitimize crypto markets while weakening investor protections, putting teachers’ pension funds at greater risk.

The union argues this shift could expose pension funds to unsafe assets and elevate the risks of fraud and financial instability.

The AFT laid out its concerns this week in a sharply worded letter addressed to Senate Banking Committee Chair Tim Scott and Ranking Member Elizabeth Warren. 

The union, which represents more than 1.8 million educators and public-sector workers, argued that the Responsible Financial Innovation Act (RFIA) fails to provide the regulatory clarity and investor protections that lawmakers have long sought for the digital asset sector. 

The AFT added that the bill would normalize crypto assets without addressing their volatility. It warned that this approach could expose retirement systems to risks they are built to avoid.

“Rather than providing desperately needed regulation and commonsense guardrails, this bill exposes working families—families with no current involvement in or connection to cryptocurrency—to economic risk and threatens the stability of their retirement security,” the letter read. 

A central point of contention is the bill’s treatment of blockchain-based securities. 

According to the AFT, the RFIA would allow companies outside the crypto industry to list their stock on a blockchain. This shift, the union said, would let them bypass traditional securities regulations.

The AFT also warned that such a change would weaken safeguards like mandatory disclosures, registration rules, and oversight of intermediaries. These protections play a crucial role in safeguarding pension funds against fraud and mismanagement.

By reducing these guardrails, the AFT believes the bill blurs the line between regulated securities and unregulated digital assets. This could leave long-term retirement portfolios more vulnerable to market instability.

The AFL-CIO urges lawmakers to oppose the Responsible Financial Innovation Act.

Poorly regulated crypto puts workers’ retirement funds and the economy’s stability – including our jobs – at risk. pic.twitter.com/fJctRszolW

This is not the first time organized labor has raised concerns about the RFIA, following a similar warning from the AFL-CIO in October over pension and financial stability risks.

The union’s warning comes as Congress struggles to create a unified regulatory framework for digital assets. 

Many of the AFT’s concerns about weak protections and regulatory gaps now appear in Senate debates over the RFIA. 

These concerns were reinforced today in a leaked Democratic counteroffer that outlined the party’s priorities for revising the bill.