US Senator Elizabeth Warren is seeking answers from federal law enforcement and financial authorities over whether decentralized cryptocurrency exchanges are under active investigation. Key Takeaways: Warren is asking whether US authorities are investigating DeFi exchanges over national security risks. She warns DeFi could enable illicit finance as crypto legislation stalls in Congress. The letter raises concerns about political influence and Trump-linked crypto activity. In a letter sent Monday to Treasury Secretary Scott Bessent and US Attorney General Pam Bondi, the Massachusetts Democrat asked whether their departments were “investigating significant national security risks posed by decentralized cryptocurrency exchanges like PancakeSwap.” Warren requested a response by Jan. 12, framing the inquiry as part of broader congressional debates over crypto regulation. Warren Warns DeFi Could Be Exploited for Illicit Finance Without Oversight Warren said the public deserves clarity as Congress weighs crypto market structure legislation, including measures aimed at preventing illicit finance. She pointed to concerns raised by national security experts and the crypto industry itself, warning that decentralized finance could be exploited by terrorists, criminals and sanctioned states if left unchecked. The senator also questioned whether political considerations were influencing how crypto-related cases are enforced, citing what she described as selective action under the Trump administration. Her letter referenced reports linking crypto activity to North Korea’s money laundering efforts and flagged claims that enforcement priorities may not be applied evenly across the sector. Warren’s intervention comes as legislative momentum around crypto regulation slows in Washington. SEN. ELIZABETH WARREN SENDS LETTER TO TREASURY & DOJ OVER TRUMP-LINKED $USD1 AND PANCAKESWAP, WARNING OF NATIONAL SECURITY RISKS AND POTENTIAL FOR MONEY LAUNDERING ON DEXS pic.twitter.com/EDhQoZCzpO — The Wolf Of All Streets (@scottmelker) December 16, 2025 Lawmakers had expected the Senate Banking Committee to advance the Responsible Financial Innovation Act, a key digital asset market structure bill, before the end of the year. However, committee chair Tim Scott confirmed Monday that a markup hearing on the legislation has been delayed until 2026. 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 said such activity raised questions about conflicts of interest and the president’s potential influence over crypto policy, concerns echoed by other Senate Democrats. The renewed focus on Warren’s crypto stance comes as political dynamics shift ahead of the next election cycle. John Deaton, a lawyer known for representing XRP holders in legal battles with regulators, announced in November that he will run as a Republican for the US Senate in 2026. Deaton previously challenged Warren in the 2024 election and has emerged as a vocal critic of her approach to digital asset regulation. Warren, Reed Urge DOJ and Treasury to Probe Trump-Linked Crypto Firm Last month, Warren and Jack Reed also called on the DOJ and the US Treasury to investigate World Liberty Financial, a crypto company linked to the Trump family, 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 in response to the allegations. 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. The post Elizabeth Warren Presses DOJ, Treasury on Potential Probe of DeFi Exchanges appeared first on Cryptonews .
