Consumer advocates and financial-reform organizations are joining forces with several unions to oppose Senate legislation aimed at regulating the U.S. crypto markets, contending that the current proposals leave consumers at risk of fraud.
“The legislative measures under consideration in the Senate have largely neglected to tackle the
significant harms stemming from the crypto industry, and the Senate should not entertain any bill that fails to comprehensively address these issues,” stated the letter sent to senators this week, backed by nearly 200 organizations, including Better Markets, Public Citizen, Americans for Financial Reform, and the Communications Workers of America. This followed a similar concern expressed this week by the teachers’ union, AFT.
While the House of Representatives passed a bill earlier this year to regulate crypto in the U.S., known as the Digital Asset Market Clarity Act, the Senate is still working on its version, which is largely based on the Clarity Act but pursuing different strategies. The senators involved in the closed-door negotiations have mentioned that the process is close to completion, with Senator Cynthia Lummis expressing hopes for a formal markup next week.
A key issue in the discussions revolves around Democrats’ worries about potential conflicts of interest involving government officials — particularly President Donald Trump — who have ties to crypto businesses as they shape policy for the industry. The progressive groups’ letter also highlighted this concern.
“Any legislation must effectively tackle the unprecedented and detrimental impacts of President Trump’s and his family’s conflicted investments in various crypto ventures,” it noted.
Lummis stated that she has collaborated on ethics provisions for the bill with a Democratic colleague, but the White House has thus far dismissed the proposals.
The latest opposition letter from consumer advocates also garnered signatures from progressive environmental organizations that typically do not engage in financial policy discussions, such as Greenpeace, the Center for Biological Diversity, and Animals Are Sentient Beings, Inc.
A divide has emerged among Democratic lawmakers regarding support for crypto legislation, with Senator Elizabeth Warren, the leading Democrat on the Senate Banking Committee, spearheading criticism from more progressive members.
“This legislation poses significant risks to the pensions of working families and the overall stability of the economy,” according to the teachers’ union letter, which emphasizes concerns over the potential threats to its members’ retirement funds presented by the U.S. adoption of cryptocurrency. “Rather than remaining silent on crypto, this bill eliminates the few existing safeguards and erodes many protections for traditional securities. If enacted, it will undermine the safety of numerous assets and create difficulties across retirement investments.”
Despite strong objections from some Democrats, Congress has managed to advance bipartisan votes on crypto legislation, including the recently approved stablecoins law earlier this year.
Read More: Teacher’s Union Says U.S. Senate Crypto Bill Puts Pensions and Economy at Risk: CNBC
