Elizabeth Warren Sounds Alarm on Trump’s Crypto Dealings, PancakeSwap
Senator Elizabeth Warren is raising an alarm on the potential national security risks of decentralized exchanges (DEXs), singling out PancakeSwap given its reported connection to the trading of Trump-linked stablecoin USD1 and funds stolen by North Korean hackers.
In a letter this week addressed to Treasury Secretary Scott Bessent and Attorney General Pam Bondi, Warren asked for answers by January 12 regarding gaps left by statutory and regulatory authorities that leave the U.S. vulnerable to national security risk as it pertains to DEXs and any actions the agency is taking to prevent crypto-related conflict of interests—including within the Trump family.
“You and your departments have significant responsibilities for safeguarding the American people and the U.S. financial system,” Warren wrote. “The public deserves to know whether you are investigating the serious risks identified by national security experts and the crypto industry itself.”
Warren supported her inquiry with blockchain reports from analytics firm Allium and investigations firm TRM Labs, which point to the role PancakeSwap and DeFi tools like decentralized exchanges played in crypto’s largest-ever heist, a $1.4 billion theft from crypto exchange Bybit back in February.
According to Allium’s research, around 20% of the stolen funds or $263 million, were laundered through PancakeSwap alone.
Warren points to the fact that on-chain crypto users can make use of DEXs without strict anti-money laundering program controls, like know your customer (KYC) disclosures, enabling them to “exploit decentralized platforms to move, mix, and cash out illicit funds.”
“Without regulatory monitoring, illicit actors will increasingly be able to acquire crypto assets on decentralized exchanges, and then facilitate financial transactions without having to cash out through institutions that could otherwise have monitored and reported suspicious activity to law enforcement,” she wrote.
Binance Deepens Ties to Trump-Backed Stablecoin Following Founder’s Pardon
Beyond North Korea’s attacks, Warren also highlighted PancakeSwap’s role in the trading of USD1—the dollar-backed stablecoin from Trump-backed DeFi project World Liberty Financial. In June, the DEX partnered with World Liberty Financial on a liquidity drive promotion that encouraged trading in USD1 pairs, offering more than $1 million in prizes over a four-week period.
Last week, the Trump-connected stablecoin became a “core part” of Binance infrastructure, just months after co-founder Changpeng “CZ” Zhao’s pardon. Binance denied that there’s any link between the pardon of its former CEO and the expanded integration of USD1.
