U.S. Senator Elizabeth Warren has escalated her campaign for stricter cryptocurrency regulation by formally calling for a national-security review of decentralized finance (DeFi) platforms, specifically targeting PancakeSwap. In a letter sent to Treasury Secretary Scott Bessent and Attorney General Pam Bondi, Warren urged scrutiny of the platform over allegations of price manipulation involving World Liberty Financial (WLFI) tokens and potential improper political influence linked to former President Donald Trump's business interests.
The senator's letter argues that DeFi platforms like PancakeSwap, which process hundreds of millions of dollars in daily transactions without standard identity checks (Know Your Customer protocols), create a dangerous environment for illicit activity. She framed the request within the ongoing legislative debate, stating lawmakers need clarity on enforcement risks while drafting rules to prevent terrorists, criminals, and hostile states from using DeFi.
This regulatory pressure coincides with a delay in Senate negotiations on a comprehensive crypto market structure bill, which have now slipped into January. Oversight of DeFi remains a central unresolved issue in these talks, with industry representatives describing the treatment of decentralized platforms as a deciding factor for their support of any final legislative package.
Despite Warren's objections, a bipartisan group of Senate Democrats and Republicans continued negotiations without her direct involvement, largely sidelining her within the Senate Banking Committee. Committee Chairman Tim Scott confirmed the bill will return to the panel's agenda in January. The White House has rejected claims of conflicts tied to Trump's crypto-related business interests, maintaining such ties do not affect enforcement decisions.
The timing adds further pressure, as extended talks risk colliding with congressional budget negotiations approaching a January 30 deadline. A prior budget dispute previously shut down the federal government and delayed crypto legislation.
