- Warren urges Treasury and Fed to reject taxpayer-funded crypto bailout plans.
- Bitcoin’s nearly 50% drop since October has triggered losses for major industry figures.
- Warren warned that government intervention could benefit wealthy crypto investors and WLFI.
Sen. Elizabeth Warren called on the US Treasury Department and the Federal Reserve to confirm they will not use taxpayer funds to support cryptocurrency investors amid the ongoing market pullback.
The Massachusetts Democrat sent a letter to Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell, warning that any government intervention would transfer public funds to wealthy crypto investors and large market participants.
Her request comes as Bitcoin continues a prolonged decline, losing nearly half of its value since reaching a peak in October. Warren argued that a potential bailout would disproportionately benefit highly leveraged investors and major industry figures while exposing taxpayers to financial risk.
She urged federal agencies to avoid direct purchases, guarantees, or liquidity facilities designed to stabilize cryptocurrency markets.
Concerns Over Government Authority and Market Intervention
In her letter, Warren pointed to existing federal authorities that allow financial agencies to provide support to financial institutions during crises. She raised concerns about whether such powers could be used to support the cryptocurrency sector.
The senator referenced testimony from Treasury Secretary Scott Bessent before the House Financial Services Committee on Feb. 6, where he was asked whether taxpayer funds could be deployed into crypto assets.
According to Warren, the response did not clearly rule out the possibility of government intervention. She said the current market crash has been intensified by cascading liquidations of leveraged positions, increasing pressure on major investors and crypto-linked firms.
Warren added that federal agencies must focus on protecting retail investors rather than stabilizing asset prices.
Conflict Concerns and Industry Oversight
The letter warned that government support for the crypto sector could create conflicts of interest, particularly given President Donald Trump’s connection to World Liberty Financial, a cryptocurrency company co-founded by his family.
Warren said that market intervention could directly benefit Trump’s business interests and stated that financial regulators must maintain independence when overseeing the digital asset sector.
Her comments came on the same day that World Liberty Financial hosted a cryptocurrency forum for business leaders at Trump’s Mar-a-Lago club.
Also, Warren urged regulators to strengthen safeguards for retail investors participating in cryptocurrency markets. She cited rising fraud risks, noting that a record $17 billion was lost or stolen in crypto-related fraud in 2025.
Related: Crypto, Power, and Politics Collide in Warren’s Warning Over Trump-Linked Bank
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Source: https://coinedition.com/sen-warren-warns-against-taxpayer-support-for-crypto-investors-during-market-crash/
