{"id":16793,"date":"2025-10-08T13:30:51","date_gmt":"2025-10-08T11:30:51","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=16793"},"modified":"2025-10-08T13:30:51","modified_gmt":"2025-10-08T11:30:51","slug":"afl-cio-challenges-senate-cryptocurrency-legislation-amid-pension-concerns","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/10\/08\/afl-cio-challenges-senate-cryptocurrency-legislation-amid-pension-concerns\/","title":{"rendered":"AFL-CIO Challenges Senate Cryptocurrency Legislation Amid Pension Concerns"},"content":{"rendered":"

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The largest coalition of labor unions in the US expresses \u201cserious apprehensions\u201d regarding the Senate\u2019s proposed legislation to govern crypto, asserting it lacks protections for workers and inadequately regulates the industry.<\/p>\n

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) criticized the Responsible Financial Innovation Act (RFIA<\/a>), contending in a letter<\/a> to the Senate Banking Committee on Tuesday that it would present considerable dangers to workers and the financial system.<\/p>\n

The treatment of crypto assets in the bill \u201cposes hazards to both retirement funds and the overall economic stability of the US,\u201d stated AFL-CIO director Jody Calemine.<\/p>\n

He noted that the legislation would permit the crypto industry to \u201cfunction in broader and deeper manners within our financial system without adequate oversight or meaningful protections.\u201d<\/p>\n

Senators Cynthia Lummis and Kirsten Gillibrand initially introduced<\/a> the RFIA in 2022 and amended it earlier this year. The Senate Banking Committee is developing the proposal<\/a> as an alternate approach to regulating crypto with a distinct focus and regulatory priority, rather than advancing the CLARITY Act, a market structure bill passed in the House in July.<\/p>\n

Safeguarding workers and pensions<\/h2>\n

Calemine mentioned that the AFL-CIO \u201cendorses initiatives to refresh regulatory frameworks to better shield workers from the fluctuations of this asset class,\u201d but the legislation merely \u201coffers an illusion of regulation.\u201d<\/p>\n

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He emphasized that instead of protecting workers from crypto volatility, the bill \u201cwould heighten workers\u2019 exposure by permitting retirement plans such as 401(k)s and pensions to invest in this perilous asset.\u201d<\/p>\n

Increased systemic risks<\/h2>\n

Calemine also asserted that the taxpayer-backed Deposit Insurance Fund, which safeguards consumer bank deposits, would face heightened risk if banks were allowed to handle crypto custody.<\/p>\n

Additionally, he stated that the legislation<\/a> \u201cformalizes the tokenization of securities and assets\u201d thereby providing private companies an avenue to \u201cestablish a shadow public stock\u201d outside the jurisdiction of the Securities and Exchange Commission.<\/p>\n

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AFL-CIO headquarters in Washington, DC. Source: AFL-CIO<\/em><\/p>\n

2008 financial crisis reprise<\/h2>\n

The AFL-CIO likened these potential threats to those that led to the 2008 financial crisis<\/a>, which was driven by high-risk lending practices of commercial banks.<\/p>\n

\u201cBanks participating in crypto-based hedge fund trading activities, which this framework would permit, could be even more hazardous than some of the precarious financial actions undertaken prior to the 2008 financial crisis.\u201d<\/p><\/blockquote>\n

Calemine concluded with a plea to resist the Responsible Financial Innovation Act, which remains a discussion draft and has not yet been formally introduced.<\/p>\n

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