U.S. Senator Elizabeth Warren has demanded assurances from the Treasury Department and the Federal Reserve that taxpayer dollars will not be used to rescue cryptocurrency firms or investors as Bitcoin prices decline.
In a letter to Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell, Warren, a Massachusetts Democrat, stated, "Your agencies must refrain from propping up Bitcoin and transferring wealth from taxpayers to crypto billionaires through direct purchases, guarantees, or liquidity facilities."
Warren's directive arrives amidst intense scrutiny of the digital asset market and the government's potential role. While the Treasury and the Fed possess powers to provide financial support during market stress, it remains "deeply unclear what, if any, plans the U.S. government currently has to intervene in the current Bitcoin selloff," Warren noted.
Bitcoin has fallen approximately 50% from its October high, a downturn exacerbated by cascading liquidations of leveraged positions. The cryptocurrency is currently trading near $67,000.
The debate over a potential bailout occurs as policymakers consider broader acceptance of digital assets in the U.S. Despite this, Warren argued that government intervention would disproportionately benefit wealthy investors and industry insiders, warning that a bailout "would be deeply unpopular to transfer wealth from American taxpayers to cryptocurrency billionaires."
Warren, a vocal critic of the crypto industry, has previously expressed concerns about market volatility and the lack of consumer protections. Treasury Secretary Bessent has also stated that the government lacks the legal authority to support or "bail out" Bitcoin using public funds, though the Treasury is retaining seized Bitcoin.