Consumer advocates and financial reform groups are lining up alongside some unions in opposition to Senate legislation that would impose regulations on US crypto markets, arguing that current versions leave crypto consumers vulnerable to fraud.
“Legislative initiatives explored in the Senate so far have largely failed to address the issues
widespread harm caused by the crypto industry and the Senate should not consider any bill that does not fully address these issues,” said the letter sent to senators this week, signed by nearly 200 groups, including Better Markets, Public Citizen, Americans for Financial Reform and Communications Workers of America. It came after a similar objection raised this week by the teachers union, AFT.
Although the House of Representatives passed a bill earlier this year to regulate cryptocurrencies in the US, the Digital Asset Market Clarity Act, the Senate continues to craft its own version, based largely on the Clarity Act, but with some different approaches. Senators negotiating the bill in a closed-door session have said the process is nearing its end, and one of them, Sen. Cynthia Lummis, said Tuesday that she hopes it can still reach a formal margin next week.
One of the main points of debate is Democrats’ concerns about apparent conflicts of interest in government officials, particularly President Donald Trump, being involved in cryptocurrency businesses while determining industry policy. The letter from the progressive groups also touches on this point.
“Any legislation must effectively address the unprecedented and corrosive impacts of President Trump and his family’s conflicted investments in various crypto companies,” he said.
Lummis said he had worked on ethics provisions for the bill with a Democratic colleague, but the White House has so far rejected the proposals.
The latest opposition letter from consumer advocates was also signed by progressive environmental groups that do not typically intervene in financial policy, including Greenpeace, the Center for Biological Diversity and Animals Are Sentient Beings, Inc.
A rift has developed among Democratic lawmakers over support for cryptocurrency legislation, with Sen. Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, leading some of the more progressive members’ criticism of the effort.
“This legislation poses profound risks to the pensions of working families and the overall stability of the economy,” according to the letter from the teachers union, which focuses its concern on the dangers to its members’ retirement funds posed by the adoption of cryptocurrencies by the United States. “Rather than simply remaining silent on cryptocurrencies, this bill eliminates the few safeguards that exist for cryptocurrencies and erodes many protections for traditional securities. If passed, it will undermine the security of many assets and cause problems for retirement investments.”
Despite vocal pushback from some Democrats, Congress managed to move forward with bipartisan votes on cryptocurrency legislation, including the new stablecoin law passed earlier this year.
Read more: Teachers union says US Senate cryptocurrency bill puts pensions, economy at risk: CNBC
