US Senator Elizabeth Warren warns of potential national security risks posed by DEX.
TL;DR
US Senator Elizabeth Warren warns that decentralized exchanges like PancakeSwap pose national security risks, citing links to North Korean hacking and Trump-related stablecoin USD 1 trading. She has requested regulatory action from U.S. agencies by January 12.
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According to ChainCatcher, U.S. Senator Elizabeth Warren is warning about the potential national security risks posed by decentralized exchanges, specifically naming PancakeSwap due to its association with trading in the Trump-related stablecoin USD 1 and North Korean hacking activities that allegedly stole funds.
In a letter this week to U.S. Treasury Secretary Scott Bessant and Attorney General Pam Bondi, Warren requested that they respond by January 12 regarding loopholes in regulations and regulatory bodies concerning DEXs that expose the United States to national security risks, and what actions the agency is taking (including targeting the Trump family) to prevent cryptocurrency-related conflicts of interest.
During her questioning, Warren cited blockchain reports from analytics firm Allium and research firm TRM Labs as evidence, which indicated that DEXs and DeFi tools such as PancakeSwap played a role in the largest theft in cryptocurrency history (the $1.4 billion theft from the Bybit exchange in February of this year).
According to Allium's research, approximately 20% of the stolen funds, or $263 million, were laundered through PancakeSwap alone. In addition to the North Korean cyberattack, Warren also highlighted PancakeSwap's role in USD 1 trading. In June of this year, the DEX partnered with WLFI to launch a liquidity-driven promotional campaign encouraging trading in the USD 1 trading pair and offering over $1 million in rewards over four weeks.
Just last week, the stablecoin linked to Trump became a core component of Binance's infrastructure, months after its co-founder CZ received a pardon. Binance denied any connection between its former CEO's pardon and the expansion of USD 1 integration. Warren had previously condemned the president's pardon of CZ and sought answers from the Justice Department regarding the company's relationship with the president.
“I am particularly concerned about any undue political influence from the Trump administration on law enforcement decisions,” Warren wrote in a letter this week.