Elizabeth Warren Presses DOJ and Treasury on Possible Investigation of DeFi Exchanges

US Senator Elizabeth Warren is looking for information from federal law enforcement and financial authorities regarding whether decentralized cryptocurrency exchanges are currently under investigation.

Key Takeaways

Senator Warren inquires if US agencies are investigating DeFi exchanges concerning national security risks.
She highlights concerns that without legislation, DeFi could facilitate illicit financial activities.
The letter raises issues about political influence and potential ties to Trump-related crypto activities.

In a letter sent on Monday to Treasury Secretary Scott Bessent and US Attorney General Pam Bondi, Senator Elizabeth Warren, a Democrat from Massachusetts, asked if their departments are “investigating significant national security risks posed by decentralized cryptocurrency exchanges like PancakeSwap.”

Warren requested a response by January 12, positioning her questions within the broader congressional discussions about regulating cryptocurrency.

Elizabeth Warren Presses DOJ, Treasury on Potential Probe of DeFi Exchanges

Warren Highlights Risks of DeFi

Warren emphasized that the public deserves transparency as Congress deliberates over crypto market structure legislation, which includes efforts to prevent illicit financing.

She noted concerns from national security experts and the cryptocurrency industry itself, warning that if left uncontrolled, decentralized finance could be exploited by criminals, terrorists, and sanctioned nations.

The senator also raised the issue of whether political factors were affecting the enforcement of crypto-related cases, pointing to what she described as selective actions during the Trump administration.

Her letter mentioned reports suggesting connections between cryptocurrency activities and North Korea's money laundering efforts and raised concerns that enforcement priorities may not be consistently applied across the industry.

Warren's inquiry comes at a time when momentum for crypto regulation appears to be slowing in Washington.

Initially, lawmakers anticipated that the Senate Banking Committee would advance the Responsible Financial Innovation Act, a pivotal bill concerning digital asset market structure, before the year’s end.

However, committee chair Tim Scott confirmed on Monday that the markup hearing for this legislation has been postponed until 2026.

Warren's letter also addressed allegations that PancakeSwap was promoting tokens associated with World Liberty Financial, a crypto company connected to the Trump family.

She expressed that this activity raises concerns regarding potential conflicts of interest and the former president’s influence over cryptocurrency policy, sentiments echoed by other Senate Democrats.

With the upcoming election cycle changing political dynamics, Warren's cryptocurrency stance is gaining renewed attention.

John Deaton, an attorney known for advocating on behalf of XRP holders in disputes with regulators, announced in November his candidacy as a Republican for the US Senate in 2026.

Previously, Deaton had challenged Warren during the 2024 election and has become a vocal critic of her approach to digital asset regulation.

Warren and Reed Call for Investigation into Trump-Linked Crypto Firm

Last month, both Warren and Senator Jack Reed urged the DOJ and Treasury to investigate World Liberty Financial, a crypto company linked to the Trump family, regarding alleged ties to illicit activities in North Korea and Russia.

The senators referred to a September 2025 report from the watchdog organization Accountable.US, which claimed that the firm sold tokens to buyers connected to money laundering platforms, an Iranian cryptocurrency exchange, and North Korean hackers.

World Liberty Financial has denied any wrongdoing or conflicts of interest in relation to these allegations.

The company lists former President Donald Trump as a “co-founder emeritus,” with his sons Donald Jr. and Eric in roles as Web3 ambassadors, while Barron Trump is depicted as a DeFi visionary.