Sen. Warren tells Fed and Treasury: No bailout for crypto billionaires

Sen. Elizabeth Warren asked the Treasury Department and the Federal Reserve on Wednesday to confirm that they will not "use taxpayer dollars to bail out cryptocurrency billionaires and other highly leveraged cryptocurrency investors."The Massachusetts Democrat's request to Treasury Secretary Scott Bessent and Fed Chair Jerome Powell came as bitcoin continued a slide that has seen the popular cryptocurrency drop about 50% since hitting a high in October.Warren, in a letter to Bessent and Powell about a potential bailout, warned that it not only "would be deeply unpopular to transfer wealth from American taxpayers to cryptocurrency billionaires, it could also directly enrich President [Donald] Trump and his family's cryptocurrency company, World Liberty Financial."She noted that both the Treasury Department and the Fed have authorities that empower them to give financial support to banks and other entities during a financial crisis."Concerningly, at a recent hearing, in an exchange regarding his authority to bail out the cryptocurrency industry, Secretary Bessent was asked whether 'the money of our taxpayers … is … going to be deployed into crypto assets,'" Warren wrote, referring to the secretary's testimony on Feb. 6 to the House Financial Services Committee."Rather than giving a simple 'no,' he deflected, stating that '[w]e are retaining seized bitcoin,'" Warren wrote. "It's deeply unclear what, if any, plans the U.S. government currently has to intervene in the current Bitcoin selloff.""Ultimately, any government intervention to stabilize Bitcoin would disproportionately benefit crypto billionaires," wrote Warren, who is the ranking Democrat on the Senate Banking Committee. "Your agencies must refrain from propping up Bitcoin and transferring wealth from taxpayers to crypto billionaires through direct purchases, guarantees, or liquidity facilities."The Treasury Department and Fed did not immediately respond to a request for comment on Warren's letter.The letter came on the same day that World Liberty Financial hosted its first World Liberty Forum for business leaders at Trump's Mar-a-Lago club in Palm Beach, Florida.In the letter, Warren said the sell-off in bitcoin "has been amplified by cascading liquidations of leveraged positions."She wrote that Trump's crypto company World Liberty Financial "has sold around 173 wrapped Bitcoin.""This transaction was made to repay $11.75 million in USDC stablecoin debt, thereby avoiding liquidation as Bitcoin's price dropped below $63,000," she wrote."During this selloff, crypto billionaires have taken massive hits, as Bitcoin's value continues to plummet. Crypto billionaire Michael Saylor's Strategy Inc., one of the largest corporate holders of Bitcoin, has reportedly seen its shares fall nearly 20% since the beginning of the year," Warren wrote."Other major Bitcoin investors have also seen losses, including Binance founder Changpeng Zhao, who reportedly lost nearly $30 billion, and Coinbase's Brian Armstrong, who reportedly lost $7 billion."Elsewhere in the letter, Warren said that federal financial agencies "must strengthen protections for retail crypto investors."She noted that in 2025, a record $17 billion was lost or stolen in crypto fraud.Correction: This story has been revised to reflect that bitcoin has lost about half its value since its October high. A previous version mischaracterized the extent of its drop in value.Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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