Elizabeth Warren presses Treasury and DOJ on national security risks from DeFi, singling out PancakeSwap and Trump-linked World Liberty Financial as Congress stalls on crypto market rules.
Summary
- Warren’s letter asks if DOJ and Treasury are investigating “significant national security risks” from decentralized exchanges like PancakeSwap and demands answers by Jan. 12.
- She ties DeFi to terror finance, sanctions evasion and North Korea-linked laundering, while alleging selective crypto enforcement under the Trump administration and new conflicts via World Liberty Financial.
- The letter lands as the Senate Banking Committee delays a key market structure bill to 2026 and as pro-crypto Republican John Deaton prepares a fresh Senate run against Warren.
U.S. Senator Elizabeth Warren has requested information from federal authorities regarding potential investigations into decentralized cryptocurrency exchanges, according to a letter sent Monday to Treasury Secretary Scott Bessent and Attorney General Pam Bondi.
Warren and PancakeSwap go toe-to-toe in bitter crypto war
The Massachusetts Democrat asked whether the departments were “investigating significant national security risks posed by decentralized cryptocurrency exchanges like PancakeSwap,” according to the correspondence. Warren requested a response by Jan. 12, framing the inquiry as part of congressional debates over crypto regulation.
The senator raised concerns that decentralized finance could enable illicit finance as crypto legislation remains stalled in Congress, according to the letter. Warren stated the public deserves clarity as Congress weighs crypto market structure legislation, including measures aimed at preventing illicit finance.
Warren cited concerns raised by national security experts and the crypto industry regarding potential exploitation of decentralized finance by terrorists, criminals and sanctioned states, according to the letter. The senator questioned whether political considerations were influencing enforcement of crypto-related cases, citing what she described as selective action under the Trump administration.
The letter referenced reports linking crypto activity to North Korea’s money laundering efforts and raised questions about whether enforcement priorities are being applied evenly across the sector.
Warren’s letter comes as legislative momentum around crypto regulation has slowed in Washington. Senate Banking Committee chair Tim Scott confirmed Monday that a markup hearing on the Responsible Financial Innovation Act, a key digital asset market structure bill, has been delayed until 2026. Lawmakers had expected the committee to advance the legislation before the end of the year.
The letter also highlighted reports alleging that PancakeSwap had been promoting tokens tied to World Liberty Financial, a crypto company linked to the Trump family. Warren stated such activity raised questions about conflicts of interest and the president’s potential influence over crypto policy, concerns echoed by other Senate Democrats, according to the correspondence.
John Deaton, a lawyer known for representing XRP (XRP) holders in legal battles with regulators, announced in November that he will run as a Republican for the U.S. Senate in 2026. Deaton previously challenged Warren in the 2024 election and has criticized her approach to digital asset regulation.
In December, Warren and Senator Jack Reed called on the DOJ and Treasury to investigate World Liberty Financial over alleged connections to illicit actors in North Korea and Russia. The senators cited a September 2025 report from watchdog group Accountable.US, which claimed the firm sold tokens to buyers with ties to money laundering platforms, an Iranian crypto exchange and North Korean hackers. World Liberty Financial has denied any wrongdoing or conflicts of interest.
World Liberty Financial lists President Donald Trump as a “co-founder emeritus,” with his sons Donald Jr. and Eric serving as Web3 ambassadors and Barron Trump as a DeFi visionary, according to the company.
