Elizabeth Warren Calls for No Government Bailout of Crypto Billionaires
Senator Elizabeth Warren, a prominent Democrat from Massachusetts, has raised concerns about the potential use of taxpayer funds to rescue cryptocurrency investors. In a recent letter addressed to Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell, she urged them to confirm that no such actions would be taken.
The letter was sent as Bitcoin continued its downward trend, losing approximately half its value since reaching a peak in October. This decline has led to significant losses for many high-profile crypto investors, prompting Warren to voice her concerns about the implications of government intervention.
Warren’s letter coincided with an event hosted by World Liberty Financial, a company co-founded by former President Donald Trump. The forum took place at Trump’s Mar-a-Lago club in Palm Beach, Florida, drawing attention to the connections between the crypto industry and political figures.
In her letter, Warren emphasized that bailing out cryptocurrency billionaires would not only be unpopular but could also benefit Trump and his family’s business interests. She highlighted the authorities held by both the Treasury Department and the Federal Reserve to provide financial support during crises, questioning whether these powers might be used to stabilize the volatile crypto market.
Warren referenced a recent hearing where Secretary Bessent was asked about the possibility of using taxpayer money for crypto assets. Instead of a straightforward answer, Bessent deflected, stating that the government was retaining seized Bitcoin. This ambiguity has raised concerns about the government’s stance on potential interventions in the current Bitcoin selloff.
Warren argued that any government action to prop up Bitcoin would disproportionately benefit wealthy crypto investors. As the ranking Democrat on the Senate Banking Committee, she called on the agencies to avoid actions that could transfer wealth from taxpayers to these individuals through direct purchases, guarantees, or liquidity facilities.
A Fed spokesperson responded that they had received the letter and planned to provide a response. However, the Treasury Department and the Fed did not immediately comment on the matter.
Impact on Major Crypto Investors
Warren also pointed out that the ongoing Bitcoin sell-off has been exacerbated by cascading liquidations of leveraged positions. She noted that World Liberty Financial, Trump’s crypto company, sold around 173 wrapped Bitcoin to repay $11.75 million in USDC stablecoin debt, thereby avoiding liquidation as Bitcoin’s price dropped below $63,000.
Other major players in the crypto space have also suffered significant losses. For instance, Michael Saylor’s Strategy Inc., one of the largest corporate holders of Bitcoin, has seen its shares fall nearly 20% since the start of the year. Additionally, Binance founder Changpeng Zhao reportedly lost nearly $30 billion, while Coinbase’s Brian Armstrong experienced a loss of $7 billion.
Calls for Enhanced Protections
In addition to her concerns about bailouts, Warren emphasized the need for stronger protections for retail crypto investors. She highlighted that in 2025, a record $17 billion was lost or stolen in crypto fraud, underscoring the risks faced by everyday investors.
Warren’s letter serves as a reminder of the broader implications of the crypto market’s volatility and the need for careful oversight to protect both individual investors and the public interest. As the debate over government intervention continues, her call for transparency and accountability remains a critical point of discussion.