Warren Urges Caution on Crypto Bailouts

On Wednesday, Senator Elizabeth Warren, a Democrat from Massachusetts and a key figure on the Senate Banking, Housing, and Urban Affairs Committee, urged the Treasury Department and the Federal Reserve to make sure that “taxpayer funds are not used to bail out crypto billionaires and other highly leveraged crypto investors.”

The Massachusetts Democratic Party specifically called out Treasury Secretary Scott Bessent and Federal Reserve Chairman Jerome Powell regarding the state of Bitcoin, which has plunged approximately 50% since reaching its peak in October and is still on a downward trend.

Warren expressed concerns in her letter to Bessent and Powell, stating that “transferring wealth from American taxpayers to crypto billionaires is not only highly unpopular, but could also directly enrich the President,” referring to President Trump’s cryptocurrency venture, World Liberty Financial.

It’s worth noting that the Treasury and the Federal Reserve do have the authority to offer financial support to banks and other organizations during times of economic distress. Warren highlighted a recent exchange during a hearing where Bessent was asked if taxpayer money would be used for crypto assets. Instead of a clear denial, he mentioned that “they are holding on to the seized Bitcoin.” This left Warren questioning the government’s stance on potential intervention in what is being called the Bitcoin crash.

She stated, “Ultimately, any government intervention to stabilize Bitcoin would unfairly benefit crypto billionaires,” emphasizing that agencies should avoid actions that would essentially transfer wealth from taxpayers to these investors through direct support or liquidity measures.

The Treasury and the Federal Reserve had not provided immediate comments regarding Warren’s concerns. Coincidentally, her letter was sent out on the same day that World Liberty Financial hosted a major business forum at Mar-a-Lago in Florida.

Warren also pointed to the reasons behind Bitcoin’s decline, noting it’s been “amplified by a cascading liquidation of leveraged positions.” She mentioned that President Trump’s company sold around 173 wrapped Bitcoins to settle an $11.75 million stablecoin debt, preventing liquidation as Bitcoin prices dropped below $63,000.

Additionally, she remarked on the significant losses faced by crypto billionaires, citing that Michael Saylor’s company has seen nearly a 20% drop in stock value this year. Other well-known figures in the crypto space, like Changpeng Zhao and Brian Armstrong, have also reported billions in losses amid this downturn.

In another part of her letter, Warren stressed the need for federal financial institutions to enhance protections for individual crypto investors, especially since around $17 billion was reported lost or stolen in 2025 due to fraud in the cryptocurrency sector.

Correction: An earlier version of this article inaccurately characterized the extent of Bitcoin’s decline; it has indeed lost about half of its value since October.