Market Structure Bill Could Trigger Financial Crisis

The American Federation of Teachers (AFT), a labor union representing 1.8 million members, urged US lawmakers to rethink the crypto market structure bill, warning it could lead to the next financial crisis. 

In a Dec. 8 letter sent to the Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, AFT President Randi Weingarten said the Responsible Financial Innovation Act presents “profound risks to the pensions of working families and the overall stability of the economy.”

“We believe that if enacted, this bill has the potential to lay the groundwork for the next financial crisis,” she said.

Crypto Market Structure Bill Could Open The Floodgates To Widespread Fraud, Warns AFT

Weingarten expressed the AFT’s wide-ranging concerns over the bill, including that if it passes it could open the floodgates to fraud and unethical practices across retirement plans. 

One of the main concerns with the legislation is that it “pretends that crypto assets are stable and mainstream, and they are not,” Weingarten said in the letter. 

“Rather than just being silent on crypto, this bill strips the few safeguards that exist for crypto and erodes many protections for traditional securities,” she added. 

The legislation could end up undercutting “the safety of many assets and cause problems across retirement investments,” she said,  

She said the union is particularly alarmed that the legislation would allow non-crypto companies to put their stock on the blockchain and ”evade the entire securities regulatory framework that currently exists.”

This would allow crypto to completely avoid requirements that protect investors in securities, such as registration, reporting and regulation of intermediaries that facilitate transactions, she said. 

Tokenized stock market overview (Source: RWA.xyz)

The tokenization of stocks has been one of the main concerns as the bill gains momentum on Capitol Hill. It has also been a major hurdle to getting support from Democrats, which will be needed for passage. 

“This loophole and the erosion of traditional securities law will have disastrous consequences: Pensions and 401(k) plans will end up having unsafe assets even if they were invested in traditional securities,” Weingarten said. ”The legislation being considered by the committee does little to curb the illegal activity, fraud and corruption that continues to be prevalent in anonymous crypto markets. It is as irresponsible as it is reckless.”

Senator Lummis Anticipates Markup Next Week

The Responsible Financial Innovation Act, which builds on a bill that was passed by the House of Representatives over the summer, is co-sponsored by Senator Cynthia Lummis as well as Senator Bernie Moreno and Chairman Scott. 

The proposed legislation aims to create a structure to regulate the crypto market. Progress around the Senate’s version of the bill had been stalled for weeks due to the longest US government shutdown in history.

Senator Lummis said at the Blockchain Association Policy Summit in Washington, DC, on Tuesday that she anticipates a markup hearing for the legislation will happen before Congress breaks for the holidays. A markup involves lawmakers considering amendments and changes before a bill is sent to the Senate for a vote.

Our first panel on Day 2, @SenLummis =and @gillibrandny with @julie_stitzel The Policy Path Ahead: Bipartisan Leadership on Digital Assets… pic.twitter.com/OeZakLaeKv

— Blockchain Association (@BlockchainAssn) December 9, 2025

While acknowledging concerns around the legislation’s progress, Senator Lummis said that drafts were “changed so much every few days” during bipartisan discussions. 

“I think that we’re to the point where it’s better to go ahead with a product and mark it up next week and then give everybody a break over the Christmas break to catch their breath,” she said. 

Lummis said that her goal is to share a draft by the end of this week for the industry to vet, before Republicans and Democrats review it. Thereafter, she plans for the legislation to go to markup next week.

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