Elizabeth Warren, who represents Massachusetts in the American Senate, asked for a clear commitment from the Treasury Department and the US Federal Reserve (Fed) that cryptocurrency investors or companies will not be supported with public resources. In her letter, Warren pointed out that such an intervention could mean transferring funds taken from taxpayers to large crypto investors.
The Decline in Bitcoin and the Concerns That Come to the Agenda
Warren’s warning came after Bitcoin’s value fell by almost half since October. It was stated that the recent sharp declines were deepened by the successive liquidations of over-leveraged positions and that both individual and institutional investors were affected by this process. Following these developments, the losses experienced in giant crypto companies and the market became more prominent.
Institutional Investors and Individual Users
In Warren’s letter, it was stated that the shares of Strategy company, managed by Michael Saylor, which is among the companies with the most Bitcoin on its balance sheet, have decreased by nearly 20 percent since the beginning of the year. The personal fortunes of Binance founder Changpeng Zhao and Coinbase CEO Brian Armstrong also suffered a decline of billions of dollars. Additionally, according to recent reports, it was emphasized that there will be approximately $17 billion in investor losses or fraud in crypto assets in the USA in 2025.
World Liberty Financial, owned by Donald Trump’s family, also came to the fore in this process. The institution in question paid off its debt in USDC by selling 173 wrapped Bitcoins at a time when the Bitcoin price fell below $63,000 and avoided a potential liquidation.
Warren pointed out that as a result of such transactions and corporate actions, possible public intervention could provide direct profits to investors at the highest level. He also emphasized the need for greater consumer protection to ensure that the interests of institutional and large investors are not compromised.
“Your agencies should avoid transferring assets by supporting Bitcoin and offering direct purchases, guarantees or liquidity to crypto billionaires with public funds.”
At a hearing in the US House of Representatives in February, Treasury Secretary Scott Bessent was asked whether the government would invest in crypto assets. Bessent did not give a direct answer and stated that only the Treasury held the Bitcoins. Warren described this statement as unclear and stated that it is still unclear whether the government has a plan to intervene in the Bitcoin market.
In her letter, Warren stated that the US Federal Reserve and the Treasury Department have broad powers to provide support to institutions in financial crises, and stated that these tools should not be used for risky digital assets. He emphasized that this policy should not turn into the aim of protecting the assets of large-scale investors.
The Fed reportedly received Warren’s message and announced that it was preparing a response. The Ministry of Treasury did not immediately make a statement on the issue. Bitcoin traded just below the $67,000 level as of the day the news was written.
