Senator Warren Warns Fed Against Bitcoin Crash Rescue Amid Liquidity Pump Claims

U.S Senator Elizabeth Warren has come out to warn the Federal Reserve, in conjunction with the Treasury, not to pump in liquidity to save the current Bitcoin crash. She said this could only make crypto billionaires richer at the expense of taxpayers.

Warren Calls for Hands-Off Approach as Bitcoin Crash Continues

As reported by CNBC, Elizabeth Warren sent a letter to Treasury Secretary Scott Bessent and Federal Reserve Chairman Jerome Powell urging them not to bail out “cryptocurrency billionaires” with taxpayer funds.

The letter is in the wake of Bitcoin crashing over 50% from its record high in October. It fell to as low as $60,000 on February 6. She pointed out that both the Treasury Department and the Fed have powers that enable them to provide financial assistance to banks and other institutions during a financial crisis.

What is alarming to her is that during a recent hearing, in a discussion about his power to bail out the crypto market downturn, Secretary Bessent was asked if the funds of our taxpayers would be used to fund the crypto market. Warren quoted the secretary’s testimony in the letter.

“Rather than giving a simple ‘no,’ he deflected, stating that ‘we are retaining seized Bitcoin,’” Warren said. “It’s deeply unclear what, if any, plans the U.S. government currently has to intervene in the current Bitcoin selloff.”

She also said that the agencies should not attempt to rescue the Bitcoin crash. She also said that they should not use direct purchases or guarantees to move funds from taxpayers to crypto billionaires.

Senator Continues Attacks on Trump-Linked Businesses

Warren said that the bailout “would be deeply unpopular to transfer wealth from American taxpayers to cryptocurrency billionaires.” It would also directly enrich President Trump and his family’s cryptocurrency company, World Liberty Financial.

In the letter, Warren said that the sell-off in BTC has been fueled by a cascading liquidation of leveraged positions. She also said that Trump’s crypto company, World Liberty Financial, has sold about 173 wrapped Bitcoin.

“This transaction was made to repay $11.75 million in USDC stablecoin debt, thus avoiding liquidation as the price of Bitcoin crashed below $63,000,” she wrote.

The U.S Senator has been a voice against Trump-tied companies. The latest target was the World Liberty Bank application, which she asked the OCC to stop the review process.

In addition, Warren has been leading an investigation to look into the 49% ownership of the UAE in the WLFI company. She specifically mentioned the timing of the investment and its relation to the President’s election victory in 2024.