Sen. Elizabeth Warren is turning up the heat on DeFi, asking federal authorities to spell out whether decentralized exchanges like PancakeSwap pose national security risks — and whether those risks are being investigated.
In a letter sent Monday to Treasury Secretary Scott Bessent and Attorney General Pam Bondi, Warren requested a formal response by Jan. 12, tying her inquiry to the broader congressional debate over crypto-market rules. With comprehensive crypto legislation stalled on Capitol Hill, the Massachusetts Democrat said the public deserves clarity about whether decentralized finance is enabling illicit actors, including terrorists, criminals and sanctioned states, to exploit digital-asset rails.
Warren singled out PancakeSwap, a leading decentralized exchange, and raised questions about whether political factors are shaping enforcement priorities. The letter cites national security and industry concerns that DeFi protocols could be used for money laundering and other illicit finance — including reports linking crypto activity to North Korea’s laundering operations — and asks whether enforcement is being applied evenly across the sector.
The senator also pointed to reports that PancakeSwap had been promoting tokens tied to World Liberty Financial, a crypto firm described in filings as having links to the Trump family. Warren said that activity raises potential conflict-of-interest questions and broader worries about presidential influence over crypto policy. World Liberty Financial has denied wrongdoing or conflicts of interest; the company lists former President Donald Trump as “co-founder emeritus” and names several Trump family members in promotional roles.
Warren’s letter arrives as lawmakers’ ability to advance digital-asset legislation has slowed. Senate Banking Committee Chair Tim Scott confirmed a planned markup of the Responsible Financial Innovation Act — a key market-structure bill for digital assets — has been delayed until 2026, dashing hopes the committee would act before year-end.
The scrutiny of World Liberty Financial has intensified in recent months: in December, Warren and Sen. Jack Reed asked the DOJ and Treasury to investigate the firm after a September 2025 report from watchdog Accountable.US alleged the company sold tokens to buyers tied to money-laundering platforms, an Iranian exchange and North Korean hackers. World Liberty denies the allegations.
The political backdrop is growing more crowded. Attorney and XRP advocate John Deaton — who challenged Warren in 2024 — announced in November he will run as a Republican for the U.S. Senate in 2026 and has been vocal in criticizing Warren’s approach to crypto regulation.
What this means for the market: Warren’s demands underscore growing regulatory and political scrutiny of DeFi protocols. With Congress stalled and enforcement questions lingering, major decentralized platforms and closely tied firms may face heightened oversight and reputational risk as regulators and lawmakers press for answers.
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