Senator Elizabeth Warren is elevating an alarm on the potential nationwide safety dangers of decentralized exchanges (DEXs), singling out PancakeSwap given its reported connection to the buying and selling of Trump-linked stablecoin USD1 and funds stolen by North Korean hackers.
In a letter this week addressed to Treasury Secretary Scott Bessent and Lawyer Normal Pam Bondi, Warren requested for solutions by January 12 relating to gaps left by statutory and regulatory authorities that go away the U.S. susceptible to nationwide safety threat because it pertains to DEXs and any actions the company is taking to forestall crypto-related battle of pursuits—together with throughout the Trump household.
“You and your departments have important tasks for safeguarding the American individuals and the U.S. monetary system,” Warren wrote. “The general public deserves to know whether or not you might be investigating the intense dangers recognized by nationwide safety consultants and the crypto trade itself.”
Warren supported her inquiry with blockchain studies from analytics agency Allium and investigations agency TRM Labs, which level to the position PancakeSwap and DeFi instruments like decentralized exchanges performed in crypto’s largest-ever heist, a $1.4 billion theft from crypto trade Bybit again in February.
In keeping with Allium’s analysis, round 20% of the stolen funds or $263 million, have been laundered by means of PancakeSwap alone.
Warren factors to the truth that on-chain crypto customers could make use of DEXs with out strict anti-money laundering program controls, like know your buyer (KYC) disclosures, enabling them to “exploit decentralized platforms to maneuver, combine, and money out illicit funds.”
“With out regulatory monitoring, illicit actors will more and more be capable of purchase crypto property on decentralized exchanges, after which facilitate monetary transactions with out having to money out by means of establishments that might in any other case have monitored and reported suspicious exercise to legislation enforcement,” she wrote.
Binance Deepens Ties to Trump-Backed Stablecoin Following Founder’s Pardon
Past North Korea’s assaults, Warren additionally highlighted PancakeSwap’s position within the buying and selling of USD1—the dollar-backed stablecoin from Trump-backed DeFi mission World Liberty Financial. In June, the DEX partnered with World Liberty Financial on a liquidity drive promotion that inspired buying and selling in USD1 pairs, providing greater than $1 million in prizes over a four-week interval.
Final week, the Trump-connected stablecoin became a “core part” of Binance infrastructure, simply months after co-founder Changpeng “CZ” Zhao’s pardon. Binance denied that there’s any hyperlink between the pardon of its former CEO and the expanded integration of USD1.
