Senator Elizabeth Warren is urging the Treasury Department and the Federal Reserve to confirm their commitment against using taxpayer funds to bail out cryptocurrency billionaires and heavily leveraged investors. In a letter addressed to Treasury Secretary Scott Bessent and Fed Chair Jerome Powell, the Massachusetts Democrat expressed her concerns amid a significant downturn in the value of bitcoin, which has dropped approximately 50% since reaching its peak in October.
Warren stressed that any potential bailout would not only be unpopular among American taxpayers but could also financially benefit President Donald Trump’s cryptocurrency company, World Liberty Financial. This concern is compounded by the fact that both the Treasury and the Fed have powers that could enable them to provide financial support to banks and other entities during times of crisis.
In her letter, Warren referenced a recent hearing in which Secretary Bessent appeared evasive when questioned about the possibility of utilizing taxpayer funds in the cryptocurrency sector. Instead of offering a definitive “no,” Bessent’s remarks suggested a more ambiguous stance, particularly when he mentioned retaining seized bitcoin.
Warren expressed that any government intervention aimed at stabilizing bitcoin would primarily advantage crypto billionaires, emphasizing that such actions should not involve taxpayer dollars. “Your agencies must refrain from propping up Bitcoin and transferring wealth from taxpayers to crypto billionaires through direct purchases, guarantees, or liquidity facilities,” she stated.
Notably, the letter coincided with an event at Trump’s Mar-a-Lago club, where World Liberty Financial hosted its inaugural World Liberty Forum for business leaders. As the bitcoin sell-off continues, Warren noted that the decline has been exacerbated by a wave of liquidations among leveraged positions. She highlighted that World Liberty Financial had sold approximately 173 wrapped bitcoins to repay a debt of $11.75 million, averting a liquidation scenario as bitcoin’s price dipped below $63,000.
Warren also observed the significant financial losses incurred by well-known crypto billionaires amid the crash. Corporate giant Strategy Inc., owned by Michael Saylor, has seen its shares dip nearly 20% in 2026, while Binance founder Changpeng Zhao reportedly lost close to $30 billion and Coinbase CEO Brian Armstrong faced losses around $7 billion.
In addition to addressing potential bailouts, Warren called for federal financial agencies to enhance protections for retail crypto investors, particularly in light of record losses in 2025 due to crypto fraud, which amounted to $17 billion. The letter highlights a growing apprehension surrounding the volatility and risks associated with cryptocurrency investments, especially for average investors.
