Senator Elizabeth Warren has raised significant concerns during the confirmation process of Scott Bessent, nominated to be the next Treasury Secretary. Ahead of his Senate Finance Committee confirmation hearing, Warren outlined her concerns in a detailed 31-page letter, focusing on several critical issues including cryptocurrency regulation, tax policies, financial deregulation, and the decline of small banks.
Crypto Regulation
Warren questioned Bessent on the regulation of cryptocurrencies, specifically asking whether the Treasury’s Office of Foreign Assets Control (OFAC) should have jurisdiction over stablecoins to mitigate risks like money laundering and sanctions evasion. She emphasized the need for clear oversight of crypto companies that could threaten financial stability and demanded specifics on how Bessent planned to regulate the sector to prevent potential risks.
Tax Policies and the Deficit
Warren also challenged Bessent’s stance on tax policy, particularly his support for the 2017 tax cuts under the Trump administration, which added approximately $4.5 trillion to the federal deficit. She criticized his “3-3-3” strategy, which advocates for tax cuts, deficit reduction, and economic growth, pressing him for more details on how he would implement this plan while balancing the nation’s fiscal health. She also demanded clarity on how he would enforce the Corporate Alternative Minimum Tax (CAMT) and address the carried interest loophole, which allows wealthy investors to pay lower taxes on certain income.
Deregulation and Financial Stability
Warren expressed concerns about Bessent’s endorsement of financial deregulation, linking it to past economic crises, including the 2008 financial collapse and the 2023 failure of Silicon Valley Bank (SVB). She referenced a Federal Reserve report that attributed SVB’s collapse to weakened regulations and asked Bessent if he agreed with this assessment. Warren further sought assurance that Bessent would not support policies that could lead to another banking crisis and emphasized the importance of enforcing the Dodd-Frank Act to safeguard against financial instability.
Small Banks and Community Banking
Warren also addressed the decline of small banks, which have decreased from 84% of U.S. banks in 1994 to 52% in 2022. She questioned how Bessent planned to support smaller banks, which play a crucial role in community development and small business lending. Additionally, she raised concerns about the Federal Deposit Insurance Corporation’s (FDIC) ability to manage failing banks, urging for bipartisan measures to raise deposit insurance limits to help small businesses.
IRS and Tax Compliance
In another criticism, Warren opposed efforts by Republicans to slash $20 billion from the IRS budget, warning that this could hurt tax compliance efforts, particularly for large corporations. She questioned how Bessent would maintain the quality of audits and recover revenue without adequate IRS funding.
Crypto Industry’s View on Bessent
Despite Warren’s criticism, some in the crypto industry, including Ripple CEO Brad Garlinghouse, have expressed support for Bessent, calling him a pro-innovation nominee. Garlinghouse hinted that Bessent’s appointment could lead to greater clarity on the ongoing Ripple-SEC case, signaling potential progress for the crypto market under his leadership.
In summary, Senator Warren’s detailed inquiry into Bessent’s views on financial and crypto regulation underscores her concerns about the potential impact of deregulation and the importance of safeguarding both financial stability and consumer protections.
Related topics:
Solana ETF Approval Odds Soar Ahead of July 2025: Polymarket Update
Diverging Odds: Will Trump Approve Strategic Bitcoin Reserves?
