US senator sounds alarm on DeFi, cites PancakeSwap amid market structure delay

cointelegraphPublished on 2025-12-16Last updated on 2025-12-16

Abstract

US Senator Elizabeth Warren has called on the Treasury Department and the Department of Justice to investigate potential national security risks posed by decentralized cryptocurrency exchanges, specifically citing PancakeSwap and Uniswap. In a letter to officials, she expressed concerns over money laundering linked to North Korea and possible improper political influence from the Trump administration, including allegations that PancakeSwap promoted coins tied to the Trump family’s crypto venture. Warren emphasized the need for clarity on whether authorities are seriously examining these risks as Congress considers DeFi-related market structure legislation. The markup hearing for the Responsible Financial Innovation Act has been delayed to 2026. Separately, crypto advocate and XRP lawyer John Deaton, who previously ran against Warren, announced he will campaign again for the Senate in 2026.

US Senator Elizabeth Warren, one of the more outspoken voices against digital assets in Congress, is calling for answers from Justice Department and Treasury Department officials about a potential investigation into decentralized crypto exchanges, citing concerns over PancakeSwap and Uniswap.

In a Monday letter to Treasury Secretary Scott Bessent and US Attorney General Pam Bondi, Warren asked whether their respective departments were “investigating significant national security risks posed by decentralized cryptocurrency exchanges like PancakeSwap.”

The Massachusetts senator raised concerns about “improper political influence” from the Trump administration over the selective enforcement of crypto companies and reports of money laundering tied to North Korea, asking for a response by Jan. 12.

“As Congress considers crypto market structure legislation—including rules to prevent terrorists, criminals, and rogue states from exploiting decentralized finance (DeFi) to fund their activities—it is critical to understand whether you are seriously investigating these risks,” Warren wrote to Bessent and Bondi, adding:

“The public deserves to know whether you are investigating the serious risks identified by national security experts and the crypto industry itself.”
Monday letter from Senator Elizabeth Warren. Source: Senate Banking Committee

Warren’s letter came as the US Senate prepared to wind down activities before the chamber broke for the holidays. Some Republicans on the Banking Committee had expected to address the digital market structure bill, known as the Responsible Financial Innovation Act, before the end of the year. However, Chair Tim Scott confirmed on Monday that a markup hearing on the legislation had been pushed to 2026.

Related: Top US Democrat signals fight over crypto market structure

The Massachusetts senator also raised concerns over reports that PancakeSwap had been “drumming up interest among traders to use coins issued by the Trump family’s main crypto company, World Liberty Financial.”

Some Senate Democrats have raised concerns about the US president’s potential influence and conflicts of interest regarding the legislation, given his and his family’s ties to the crypto industry.

XRP lawyer who challenged Warren in 2024 will run again

John Deaton, the lawyer who ran against Warren in the 2024 US election, is making another bid for Congress. Deaton has been an advocate for XRP (XRP) holders in court, emerging as a prominent figure in the cryptocurrency industry over the past few years.

In November, he announced that he would run as a Republican for the US Senate again in 2026. Warren is not up for reelection next year, so Deaton will be attempting to unseat Democratic Senator Ed Markey.

Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice

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