U.S. Senator Elizabeth Warren, representing Massachusetts, has issued a firm directive to the Treasury Department and the Federal Reserve, urging them to clarify their stance against utilizing taxpayer funds for the support of cryptocurrency investors and firms. In a letter addressed to Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell, Warren expressed concern that any form of government intervention could inadvertently transfer wealth from average taxpayers to affluent cryptocurrency investors.
In her correspondence, Warren explicitly stated, “Your agencies must refrain from propping up Bitcoin and transferring wealth from taxpayers to crypto billionaires through direct purchases, guarantees, or liquidity facilities.” She emphasized that a potential bailout would disproportionately favor the wealthiest stakeholders in the cryptocurrency sector, with potential implications for President Trump and his family’s financial interests, particularly through World Liberty Financial.
This letter from Warren arrives in the wake of significant turmoil in the cryptocurrency market, particularly for Bitcoin, which has seen a dramatic decline of approximately 50% since its peak in October. The Massachusetts senator pointed to exacerbating factors such as the cascading liquidations of leveraged positions, which have adversely affected both corporate and individual investors.
Warren highlighted the recent moves made by World Liberty Financial, which reportedly sold around 173 wrapped Bitcoin to settle an $11.75 million debt in USDC stablecoin, maneuvering to avoid a liquidation triggered by Bitcoin’s value falling below $63,000.
The letter also cited substantial losses among prominent crypto investors. Notably, Michael Saylor’s Strategy Inc.—a key institutional holder of Bitcoin—has experienced a nearly 20% drop in its shares since the beginning of the year. Furthermore, reports indicated that Binance founder Changpeng Zhao saw his wealth diminish by nearly $30 billion, while Coinbase CEO Brian Armstrong faced a loss of approximately $7 billion.
Warren did not only focus on institutional investors; she expressed deep concern for retail investors as well. Citing data from 2025, she stated that U.S. investors incurred record losses amounting to $17 billion due to cryptocurrency fraud. She urged federal financial agencies to bolster protections for individual crypto users, especially in light of the evolving complexity and scale of digital asset markets.
The letter made reference to a House Financial Services Committee hearing that took place on February 6, where Rep. Brad Sherman inquired whether taxpayer money might be allocated to crypto assets. Although Secretary Bessent did not provide a direct answer, he mentioned that the Treasury was “retaining seized Bitcoin,” which Warren criticized as an evasive response that left uncertainty regarding the government’s plans in the face of the Bitcoin sell-off.
Warren reminded both the Treasury and the Federal Reserve that they possess broad authorities to extend financial support to banks and other entities during economic crises; however, she firmly argued that these resources should not be diverted to stabilize Bitcoin or other high-risk digital assets—investments that mainly serve to enrich wealthier individuals.
The Federal Reserve acknowledged the receipt of Warren’s letter and indicated an intention to respond, while the Treasury Department has yet to comment on the matter. Meanwhile, Bitcoin’s trading value hovered just under $67,000, as reported by Bitcoin Magazine data.
