Market Structure Bill Could Trigger Financial Crisis

The American Federation of Teachers (AFT), a union representing 1.8 million members, has 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 Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, AFT President Randi Weingarten said: The Responsible Financial Innovation Act poses “profound risks to the retirements of working families and to the overall stability of the economy.”

“We believe that if passed, this bill could potentially lay the groundwork for the next financial crisis,” she said.

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

Weingarten expressed the AFT’s many concerns about the bill, including that if passed, it could open the door to fraud and unethical practices in retirement plans.

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

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

The legislation could end up compromising “the security of many assets and causing problems in retirement investments,” she said:

She said the union was particularly concerned that the legislation would allow non-crypto companies to place their shares on the blockchain and “escape 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 who facilitate transactions, she said.

Overview of the tokenized stock market (Source: RWA.xyz)

Stock tokenization has been one of the main concerns as the bill gains momentum on Capitol Hill. It also posed a major obstacle to gaining Democratic support, which will be needed for its passage.

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

Senator Lummis plans increase next week

The Responsible Financial Innovation Act, which builds on a bill passed by the House of Representatives over the summer, is co-sponsored by Senator Cynthia Lummis along with Senator Bernie Moreno and Speaker Scott.

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

Senator Lummis said At the Blockchain Association policy summit in Washington, D.C., on Tuesday, she expects a markup hearing for the legislation to take place before Congress recess. A markup involves lawmakers considering amendments and changes before a bill is sent to the Senate for a vote.

Our first panel of day 2, @SenLummis =and @gillibrandny with @julie_stitzel The political path forward: bipartisan leadership on digital assets… pic.twitter.com/OeZakLaeKv

– Blockchain Association (@BlockchainAssn) December 9, 2025

While acknowledging concerns about the legislation’s progress, Sen. Lummis said the plans were “changed so much every few days” during bipartisan discussions.

“I think we’ve gotten to the point where it’s best to launch a product and mark it up next week, then give everyone a break over the Christmas break to catch their breath,” she said.

Lummis said his goal is to share a draft by the end of this week for the industry to review, before Republicans and Democrats consider it. Subsequently, she anticipates that the bill will be submitted for markup next week.

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