Elizabeth Warren could reopen crypto’s banking fight without changing a single law

Elizabeth Warren's next confrontation with crypto could put companies and regulators under serious pressure without changing a single law.

With Democrats taking control of the Senate, she's expected to chair the Senate Banking Committee in January, giving her more say over which hearings it holds and what it investigates.

She's already asked for crypto companies' bank applications, records of trading safeguards, and explanations of government decisions involving the president's family. Executives and officials could soon have to defend those decisions in public, and regulators could take action if the evidence warrants it.

Much of the argument over crypto regulation concerns what Congress will allow companies to do next. Warren's requests concern decisions companies and regulators have already made and whether the records back up their explanations.

Passing a new law would require support in both chambers of Congress. As chair, Warren could use the committee's oversight powers to examine approvals and licenses that regulators have already granted.

If she becomes chair, regulators will retain the authority to suspend or revoke the licenses they issue, while she can keep an inquiry going by scheduling hearings and seeking records under the committee's rules.

That could mean asking the officials who approved a company's plans to explain what they knew at the time and why they signed off.

Some inquiries end with an exchange of letters, but Warren could keep pressing for records and testimony long after the first replies come in.

Companies that thought the hard part was over when their licenses were approved could spend months paying lawyers to review old records and preparing executives to defend decisions they thought were settled.

Congratulations on the charter, now show your work

Coinbase announced final approval for its national trust company on Nov. 9, three days after the charter took effect. The Office of the Comptroller of the Currency (OCC), the federal agency that oversees national banks, now supervises its new custody business.

Custody is the business of safeguarding customers' assets, and it's lucrative. If you run an investment fund that holds crypto for clients, both your customers and your regulators want to know how those assets are protected and who checks that the safeguards work.

Coinbase says federal supervision gives its custody business a more consistent set of rules.

Warren wants to know how the OCC decided which companies qualified for those charters. In a May letter to the agency, she asked for applications and legal analyses for nine charter decisions involving crypto companies, including Coinbase, along with records on pending applications.

She also requested confidential exhibits and communications about the charters involving the White House or the president's family, and gave the agency until June 1 to respond.

Warren argued that some companies had won permission to conduct "bank-like activities" while taking on fewer obligations than conventional banks. The OCC has its own interpretation of the law, and assessing Warren's argument requires looking at what the agency allowed each company to do.

Trust banks can safeguard assets, while conventional banks typically take deposits and make loans. Coinbase's charter authorizes it to hold crypto in custody and imposes legal duties toward the customers whose assets it holds.

The company has to operate within the scope of that approval and involve the OCC if it wants to make major changes to the business.

Ripple's approval covers custody and the management of stablecoin reserves, while its New York-regulated subsidiary continues to issue RLUSD. Both companies have trust charters, but the terms of each approval tell you which services the company can offer and under what conditions.

With those records, Congress can compare the services a company described in its application with what it offers. Senators can ask officials to explain the legal basis for an unusual approval, and communications can help establish who was involved and what role they played.

Federal supervision gives Coinbase a legal basis for offering custody and gives the OCC conditions it can enforce. Warren can focus on that specific decision by asking the officials who approved the charter to explain how they applied the law and what safeguards they required.

Warren can make a license uncomfortable

We can see the difference between Warren's current role and a chairmanship in a request she made in September. She and other Senate Banking Committee Democrats asked Chair Tim Scott to hold a public hearing on prediction markets, citing risks that included contracts tied to corporate performance.

If Warren takes the chair, she'll have more say over whether the committee holds a hearing on those contracts and whom it asks to testify.

On prediction markets, people trade contracts that pay out based on an event's outcome, such as an election. Prices can serve as a public forecast because they reflect what traders know and expect, but someone with confidential information can trade on it before everyone else finds out.

In an Oct. 28 letter to Kalshi and Polymarket, Warren and Republican Sen. John Curtis asked how the platforms police election markets. They gave the companies until Nov. 3 to say how often they blocked prohibited trades before they went through and how often they caught them later.

When a platform says it caught someone breaking the rules, senators can ask how long the person was able to trade before the company stepped in. They can also ask how the platform looks for similar trades its systems may have missed.

Kalshi has published accounts of three candidates trading on their own races, describing its investigations and exchange-level penalties. While the disclosures are evidence that it really does take enforcement action, they don't provide the full set of statistics requested in the October letter.

Warren and Sen. Jeff Merkley pursued a related issue in a Nov. 9 letter to White House Counsel Will Scharf, asking about the administration's response to a former presidential aide's prediction-market trading case and safeguards for nonpublic information.

They requested answers by Nov. 23. The focus on this case extends to the government employer responsible for protecting information that an employee could exploit.

There are limits to how far Warren could pursue these subjects and how far she can push companies like Coinbase and Kalshi. The Senate Agriculture Committee oversees the CFTC, the federal derivatives regulator, while the Senate Banking Committee's responsibilities include banks and securities markets.

So an inquiry from the Senate Banking Committee would need to fit the committee's authority, and taking its chair wouldn't give Warren personal control over every agency connected to crypto.

Who oversees crypto in the Senate

Banking examines banks and securities markets; Agriculture examines commodity and derivatives markets. Both can investigate, but neither replaces the regulator.
Two committees, different parts of crypto Senate Banking oversees banks and securities markets. Senate Agriculture oversees commodity and derivatives markets. Both can investigate within their jurisdiction, but regulators make enforcement decisions. Two committees, different parts of crypto Congress can investigate the industry, but no single committee oversees all of it Senate Banking Banking, Housing, and Urban Affairs WHAT IT DOES Oversees banks, securities markets and the financial regulators responsible for them WHY IT MATTERS FOR CRYPTO Can question how crypto companies receive bank charters and how customer assets are safeguarded IN THIS ARTICLE Crypto bank approvals and custody Senate Agriculture Agriculture, Nutrition, and Forestry WHAT IT DOES Oversees commodity and derivatives markets as well as farming Derivatives track prices or events WHY IT MATTERS FOR CRYPTO Oversees the CFTC, the regulator central to the article's questions about prediction markets IN THIS ARTICLE Prediction-market trading safeguards Both can investigate, neither is the regulator Committees hold hearings and seek records; subpoenas must follow applicable rules An inquiry does not itself impose a fine or cancel a company's bank charter Selected roles, not exclusive boundaries; some responsibilities overlap 119th Congress | Warren is currently Banking's ranking Democrat
Two committees, different parts of crypto Senate Banking oversees banks and securities markets. Senate Agriculture oversees commodity and derivatives markets. Both can investigate within their jurisdiction, but regulators make enforcement decisions. Two committees, different parts of crypto Congress can investigate the industry No single committee oversees all of it Senate Banking Banking, Housing, and Urban Affairs WHAT IT DOES Oversees banks, securities markets and the financial regulators responsible for them WHY IT MATTERS FOR CRYPTO Can question crypto bank approvals and how customer assets are safeguarded IN THIS ARTICLE Crypto bank approvals and custody Senate Agriculture Agriculture, Nutrition, and Forestry WHAT IT DOES Oversees commodity and derivatives markets as well as farming Derivatives track prices or events WHY IT MATTERS FOR CRYPTO Oversees the CFTC, the regulator central to the article's questions about prediction markets IN THIS ARTICLE Prediction-market trading safeguards Both can investigate Neither is the regulator Hearings and records requests are oversight Subpoenas must follow applicable rules An inquiry does not itself impose a fine or cancel a company's bank charter Roles can overlap | 119th Congress Warren is Banking's ranking Democrat

Committee oversight means asking questions and seeking records, not personally approving products or imposing regulatory penalties.

Selected remits in the 119th Congress, not an exhaustive map. Banking also has jurisdiction over some CFTC instruments. Future leadership and 120th Congress rules are not treated as established.
Sources and evidence

Sources

1. Senate Banking subcommittee jurisdictions
2. Senate Agriculture subcommittee jurisdictions
3. CRS survey of committee subpoena rules

Supporting facts

• Banking oversees banks and relevant OCC activities, securities and SEC activities, and export controls and international trade administration. Its jurisdiction includes some CFTC financial instruments, so the committee split is not absolute. [1]
• Agriculture oversees derivatives and digital assets through its Commodities subcommittee, with the CFTC listed as a related agency. [2]
• The current Banking website identifies Elizabeth Warren as ranking member, not chair. [1]
• Senate committees can subpoena witnesses and documents, but exercising that authority is subject to Senate and committee procedures. [3]

Method

Mapped the article's two named committees against their official jurisdiction pages and the CRS survey of subpoena rules. No numeric estimates.

Scope

Selected remits in the 119th Congress, not an exhaustive map. Banking also has jurisdiction over some CFTC instruments. Future leadership and 120th Congress rules are not treated as established.
Infographic by CryptoSlate

The Senate Banking Committee can require someone to testify by issuing a subpoena, a formal order to appear. Under the current rules, the chair of the committee or subcommittee can issue one if the panel's top senator from the minority party agrees.

The panel can also approve a subpoena by majority vote, and Senate rules give committees the power to demand documents. The Banking Committee will adopt its rules for the next Congress when it reorganizes.

The paperwork has to lead somewhere

Internal records made public at a Senate hearing can contradict what a company has said publicly. Regulators can review those records and decide whether they have grounds to investigate under existing law, while lawmakers can use the same evidence to make the case for new legislation.

In March, Warren asked Commerce Secretary Howard Lutnick how his department had assessed the security risks posed by Bitmain, a Chinese manufacturer of Bitcoin mining machines. She also wanted to know whether Bitmain's ties to American Bitcoin, a mining company co-founded by Eric Trump, had influenced the department's decisions.

If the government restricted Bitmain equipment, the agency imposing the restriction would need legal authority to act, but what it chose to restrict would determine the costs for US miners that rely on Bitmain.

Restrictions on new machines could delay deliveries, while limits on spare parts could make it more expensive to keep existing machines running.

Companies can push back on demands they consider too broad, and legal privilege or confidentiality can limit what Congress can obtain or make public.

If a company refuses to comply with a subpoena, enforcing it can take another vote or a court fight, as explained in the Congressional Oversight Manual. Any regulatory fine or decision to revoke a charter would still have to come from the agency with the authority to act.

Long before an enforcement case begins, an inquiry can tie up lawyers and executives as they gather records and prepare answers.

If senators examine a company's public assurances about safety or regulatory approval at a hearing, executives may find themselves explaining those assurances to customers as well.

The records could also support the original decision by showing that regulators identified the risks and required safeguards before granting approval.

If Warren takes the chair of the Senate Banking Committee, she'll have more say over which decisions the committee examines and whom it asks to testify. Her existing requests give some idea of where she'd start.

Crypto executives and the officials who approved their plans could find themselves explaining in public what they knew when they signed off and why they thought the safeguards were enough.