Elizabeth Warren Urges DOJ, Treasury to Probe DeFi Exchanges Over Illicit Finance, Trump Ties

Senator Elizabeth Warren has written to the Department of Justice (DOJ) and the Treasury Department, urging them to disclose whether they are actively investigating decentralized cryptocurrency exchanges (DeFi), specifically highlighting national security risks and alleged ties to the Trump administration.

Key Insights

Illicit Finance Concerns: Warren's primary concern is that DeFi platforms, operating without standard anti-money laundering (AML) and Know Your Customer (KYC) protocols, could be exploited by illicit actors including terrorists, sanctioned states like North Korea, and criminals.

Specific Allegations: The letter specifically names PancakeSwap and mentions the trading of the USD1 stablecoin from World Liberty Financial, a company reportedly linked to the Trump family. Reports suggest that hundreds of millions in stolen funds from the Bybit heist were laundered through PancakeSwap.

Political Influence: Warren also questioned whether the Trump administration's ties to the crypto industry were creating conflicts of interest or influencing federal enforcement decisions.

Legislative Context: The push for a probe comes as the U.S. Senate postpones a markup hearing for key crypto market structure legislation, the Responsible Financial Innovation Act, to 2026.

Senator Warren requested a formal response from Treasury Secretary Scott Bessent and Attorney General Pam Bondi by January 12, 2026, to clarify their investigation status and address regulatory gaps.

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