AFL-CIO Warns Senate Crypto Bill Could Put Workers’ Retirement Funds at Risk

The largest labor federation in the United States has entered the crypto regulation debate — and it’s not holding back. The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) says a Senate bill meant to bring clarity to digital asset markets may instead open the door to new financial risks that threaten American workers’ savings.

A Warning from America’s Labor Voice

In a letter sent to the Senate Banking Committee, the AFL-CIO raised “serious concerns” about the Responsible Financial Innovation Act (RFIA) — a bipartisan bill sponsored by Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.). The union argues that the proposal, while framed as a step toward modernizing financial rules, lacks meaningful safeguards to protect pension and retirement funds from volatile crypto assets.

“The bill poses risks to both retirement funds and the overall financial stability of the U.S. economy,” said AFL-CIO Director Jody Calemine. “We can’t allow untested financial instruments to find their way into workers’ 401(k)s without real oversight.”

The union’s statement marks a rare direct intervention in crypto policy — a signal that digital assets are no longer just a tech or finance issue but a labor and public safety concern.

Crypto in Retirement? The Union Says Not Yet

The AFL-CIO’s primary concern is how the bill would classify and regulate crypto-related financial products. Under its current framework, Calemine warned, employers and fund managers could be allowed to invest retirement savings in high-risk digital assets under the guise of diversification.

“Rather than insulating workers from crypto volatility, the bill could greenlight exposure by approving retirement plans that include cryptocurrencies,” Calemine said.

The union’s letter also criticized the Senate Banking Committee for what it called a “facade of regulation” — arguing that the bill’s language favors market expansion over consumer protection. The AFL-CIO supports efforts to modernize financial laws, but only if they come with clear investor protections, stable valuation standards, and robust risk assessments.

Systemic Risks on the Horizon

Beyond retirement plans, the AFL-CIO cautioned that the proposed legislation could blur the boundaries between private finance and federally insured systems.

The group highlighted that allowing banks to custody crypto could expose the taxpayer-backed Deposit Insurance Fund to digital asset risk — something that could have ripple effects similar to those seen in the 2008 financial crisis.

Calemine also pointed to the bill’s approach to tokenized securities, warning that it could lead to a “shadow public stock market” where private entities tokenize traditional assets with limited oversight.

“Codifying the tokenization of securities without a strong supervisory framework creates systemic risk,” he said. “We’ve seen what happens when oversight lags behind innovation.”

Echoes of the 2008 Financial Crisis

The union drew direct parallels between the current push for crypto integration and the excessive risk-taking that preceded the 2008 meltdown.

It warned that crypto-based hedge fund trading — if normalized within regulated markets — could prove even more unstable than the subprime instruments that triggered the last crash.

“Banks engaging in crypto-based hedge fund trading could be even riskier than the speculative activities that led to the 2008 financial crisis,” the AFL-CIO’s letter stated.

The organization’s comparison to one of the worst financial collapses in modern history underscores its message: regulation should stabilize markets, not invite history to repeat itself.

Washington’s Balancing Act

The Senate’s crypto bill — revised in 2024 to refine oversight between the SEC and CFTC — has been praised by industry advocates as a milestone toward regulatory clarity. But the AFL-CIO’s intervention signals a widening gap between Wall Street optimism and Main Street caution.

As lawmakers debate whether crypto belongs inside America’s traditional financial system, the union’s message is unambiguous:

Without strong guardrails, the promise of innovation could become a risk to the very workers it claims to empower.

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