Elizabeth Warren Tells Treasury, Fed to Rule Out Crypto Rescues

Warren Draws a Line on Crypto Bailouts

U.S. Senator Elizabeth Warren is once again pushing federal regulators to spell things out clearly. She wants them to say, in plain terms, that taxpayer money will not be used to support the cryptocurrency market if it runs into trouble.

In a letter to the U.S. Department of the Treasury and the Federal Reserve, Warren asked for written confirmation. Specifically, she wants to know that officials are not planning to buy digital assets, backstop crypto losses, or open special emergency lending programs to steady crypto prices.

Her argument is straightforward. When risky bets in crypto fall apart, investors should deal with the consequences. Taxpayers should not be asked to clean up the mess.

Market Turmoil Sparks Fresh Concerns

The letter comes after a steep slide in Bitcoin and other digital assets. Prices dropped fast. Billions in value disappeared in a short time. Traders who had borrowed heavily to increase their positions were forced to sell, sometimes at sharp losses.

Some large holders sold chunks of their crypto just to cover debts and avoid being liquidated. Smaller investors felt the pain too. Retirement savings, personal funds, side investments, many took a hit. Regulators, meanwhile, were left asking a familiar question: could stress in crypto spill over into the broader financial system?

Warren has long argued that this kind of volatility is part of the structure of crypto markets. It is not unusual. It is not shocking. It is the risk investors sign up for.

In previous remarks, she has described crypto markets as highly speculative and unpredictable. Investors, she says, know that going in.

Taxpayers Should Not Carry the Risk

At the heart of Warren’s message is concern about precedent.

If the government steps in to support crypto prices, even indirectly, it could signal that high risk investing comes with an unofficial safety net. That, she believes, would reward a relatively small group of investors who chose to take aggressive positions.

She has pointed to past financial crises, when emergency tools were used to stabilize banks and protect the broader economy. Those programs were meant to prevent systemic collapse. They were not created to shield speculative investments in digital tokens.

Warren wants regulators to say clearly that those tools will stay focused on the traditional financial system and will not be extended to crypto markets simply because prices fall.

For background on how emergency lending programs work, see the Federal Reserve’s overview of its lending facilities.

Rising Fraud and Theft Add Pressure

Another factor weighing on the debate is the rise in fraud and theft linked to crypto platforms.

About $17 billion was reported lost or stolen in 2025 through scams, hacks, and failed crypto businesses. Some cases involved fake investment schemes. Others stemmed from security breaches at exchanges. A few were tied to poorly managed companies that collapsed under pressure.

Data on crypto-related crime trends is regularly tracked by firms such as Chainalysis and discussed by regulators like the U.S. Securities and Exchange Commission.

Warren argues that these numbers point to a need for stronger rules and better oversight. In her view, the answer is not a bailout. It is clearer regulation and stricter enforcement.

She has said that people should not lose life savings because of fraud or broken platforms. But that does not automatically mean the federal government should guarantee investments that were knowingly risky.

Concerns About Conflicts of Interest

Warren also raised concerns about politically connected crypto ventures. If regulators appear willing to step in during market downturns, it could create the impression that certain companies or investors have special access or influence.

Even the perception of favoritism, she suggests, can damage public trust. Financial oversight depends heavily on confidence that rules apply equally to everyone.

What Happens Next

So far, the Treasury Department and the Federal Reserve have not issued a formal public response to Warren’s letter.

Their position could shape expectations during future downturns. If they make it clear that no intervention is planned, it would send a strong signal that crypto operates without a federal safety net.

For now, Warren’s stance is consistent with her long running criticism of the crypto industry. Investors may pursue high returns if they choose. But, in her view, they should not expect a government rescue if those bets fail.