Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—Warren presses Bessent and Powell to rule out bailout for cryptocurrency billionaires, (Feb 20, 2026)

By Joe Cox, J.D.

In a letter, Senator Warren expressed concern over cryptocurrency struggles and the possibility of a taxpayer-funded bailout that would enrich the Trump family.

Senator Elizabeth Warren (D-Mass.), the Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, has sent a letter to Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell, requesting written confirmation that neither the Department of the Treasury nor the Federal Reserve will use taxpayer funding to bail out cryptocurrency billionaires and other highly compensated cryptocurrency investors. In the letter and an accompanying press release, Senator Warren expressed concern over recent struggles in the crypto market and wanted to make sure that any bailout from the Treasury or Fed would be tailored to help individual crypto investors rather than billionaires and insiders, including the Trump family.

Senator Warren notes that the Treasury and Fed have multiple paths to provide financial support to banks and non-banks in times of financial distress. She also noted the ongoing struggles in the crypto market, writing that Bitcoin has lost about $2 trillion, or 50% of its peak value, since October 2025. Noting uncertainty as to any potential paths that the Treasury or Fed may provide in regard to those struggles, Warren warned that government must avoid “propping up Bitcoin and transferring wealth from taxpayers to crypto billionaires through direct purchases, guarantees, or liquidity facilities.”

“Not only would it be deeply unpopular to transfer wealth from American taxpayers to cryptocurrency billionaires, it could also directly enrich President Trump and his family’s cryptocurrency company, World Liberty Financial,” wrote Senator Warren.

While the Senator acknowledged that “financial agencies must strengthen protections for retail crypto investors” in light of a noted $17 billion lost or stolen to cryptocurrency scams or fraud, she urged that any relief be tailored to individual investors and not to the industry’s big-money players.

The letter requests written confirmation from Treasury and the Fed that they will not use their authorities, including but not limited to the Exchange Stabilization Fund and Section 13(3) of the Federal Reserve Act to liquidity facilities, to bail out the Bitcoin market or crypto asset intermediaries. Such confirmation is requested no later than February 27, 2026.

LegislativeActivity: Blockchain FederalReserveSystem FinTech OversightInvestigations