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

• Warren requested confirmation from Treasury Secretary Scott Bessent and Fed Chair Jerome Powell that no taxpayer money would be used for crypto bailouts through direct purchases, guarantees, or liquidity facilities
• Major crypto investors have suffered massive losses during the selloff, including Binance founder Changpeng Zhao (reportedly $30 billion) and Coinbase's Brian Armstrong ($7 billion)
• Trump's World Liberty Financial sold around 173 wrapped Bitcoin to repay $11.75 million in debt and avoid liquidation, highlighting conflicts of interest concerns raised by Warren

Summary: Sen. Warren Urges No Crypto Bailout as Bitcoin Plunges

Senator Elizabeth Warren (D-MA) has formally requested that Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell commit to not using taxpayer funds to bail out cryptocurrency billionaires and highly leveraged crypto investors. The plea comes as Bitcoin has plummeted nearly 60% from its October high.

Key Concerns:

Warren's February letter highlighted potential conflicts of interest, noting that any government intervention could directly benefit President Trump's family crypto company, World Liberty Financial (WLF). She cited Secretary Bessent's evasive response during a February 6 House Financial Services Committee hearing when asked about deploying taxpayer money into crypto assets.

Market Impact:

The Bitcoin selloff has triggered cascading liquidations of leveraged positions, causing significant losses among major crypto holders:

• Michael Saylor's Strategy Inc. suffered substantial losses as a top corporate Bitcoin holder
• Binance founder Changpeng Zhao lost nearly $30 billion
• Coinbase CEO Brian Armstrong lost approximately $7 billion

WLF itself sold around 173 wrapped Bitcoin to repay $11.75 million in USDC stablecoin debt, narrowly avoiding liquidation when Bitcoin dropped below $63,000.

Additional Context:

Warren's letter coincided with WLF hosting its first World Liberty Forum at Trump's Mar-a-Lago club. She emphasized that 2025 saw a record $17 billion lost or stolen in crypto fraud, urging federal agencies to strengthen retail investor protections.

The Senator warned that government intervention through direct purchases, guarantees, or liquidity facilities would disproportionately benefit crypto billionaires while transferring wealth from American taxpayers. Neither the Treasury Department nor the Fed immediately responded to her request.