Senator Elizabeth Warren (D-Mass.) has issued a stark warning to top U.S. financial agencies, urging them to resist any pressure to use taxpayer funds for cryptocurrency market bailouts. In formal letters addressed to Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell, Warren argued that such interventions would unfairly burden American taxpayers and could disproportionately enrich wealthy crypto investors.
The senator specifically highlighted that Bitcoin (BTC) prices have fallen approximately 60% from their peak in October 2024, creating a context where bailout pressures might emerge. She expressed concern that any government action to stabilize crypto markets—through direct purchases, guarantees, or liquidity facilities—would result in a "transfer of wealth from American taxpayers to cryptocurrency billionaires."
Warren's correspondence took direct aim at potential political conflicts of interest, warning that a bailout could "directly enrich President Trump and his family’s cryptocurrency company, World Liberty Financial (WLFI)." The letters were sent on the same day WLFI hosted its inaugural "World Liberty Forum" for crypto executives and policymakers at Trump's Mar-a-Lago club in Florida.
The debate follows a Congressional hearing where Treasury Secretary Bessent was questioned about his authority to bail out the crypto industry. During a Financial Stability Oversight Council hearing on February 4, Congressman Brad Sherman (D-Calif.) asked if the Treasury could instruct banks to buy Bitcoin or "Trumpcoin." Bessent responded that banks could hold various assets as part of diversification but questioned why taxpayer dollars would be involved, clarifying that seized Bitcoin held by the government is considered a federal asset, not tax money.
Senator Warren characterized Bessent's hearing response as a "deflection" and stated in her letter that it remains "deeply unclear what, if any, plans the U.S. government currently has to intervene in the current Bitcoin selloff." A Federal Reserve spokesperson confirmed receipt of Warren's letter but declined to comment.
This stance aligns with Warren's longstanding advocacy for stricter cryptocurrency regulation. She has previously introduced the Digital Asset Anti-Money Laundering Act and consistently emphasized the need for enhanced investor protections and regulatory clarity over direct market interventions.
