Warren to Chair Senate Banking in January, Targets Prediction Markets and Trump Crypto

Donald Trump and his family have made more than $1.4 billion from crypto deals, by the count of the senator who has tracked them line by line. That senator, Elizabeth Warren, takes charge of the Senate Banking Committee in January, and she has named prediction markets and Trump crypto ventures as her first targets.

Key points:

• Warren takes the Senate Banking gavel in January, after Democrats won the Senate in last week's midterms. The chair runs the committee that oversees banks, the Federal Reserve and crypto, and it comes with subpoena power.
• Her aide told reporters on Monday that prediction markets and Trump family crypto businesses are early targets, and warned firms to "preserve their documents and prepare to answer tough questions."
• The big market-structure bill, CLARITY, now looks stuck. It failed a key Senate vote 49-50 in September, dies when this Congress ends on January 3, and traders on Myriad give it a 2.5% chance of becoming law this year.

Her office laid out the agenda on Monday. Alongside affordability, artificial intelligence, a looming financial crisis and accountability, Warren will focus on prediction markets. Her aide's message to the firms in her sights was blunt. Big tech chiefs, administration officials, Trump family crypto businesses, Wall Street bosses and giant companies should keep their documents and get ready to answer hard questions. Democrats took the Senate in the November 3 midterm elections, and the new Congress sits on January 3, 2027. Warren is the committee's top Democrat today, and the chair is hers to take, though the formal lineup is not set yet. The Wall Street Journal first reported last week that she was expected to take the gavel, and her office has now confirmed the plan in plain words.

This is not a new fight for Warren. Over the past year she has asked for an investigation into Trump's memecoin and an ethics probe into World Liberty Financial, the Trump family's crypto company, its ties to the United Arab Emirates and the aides around it. On October 28, she wrote to Kalshi and Polymarket with Republican Senator John Curtis, asking how the two prediction market platforms stop insider trading on election bets. The worry is not abstract. An active-duty US Army soldier was charged with using secret information to place bets on Polymarket ahead of the capture of Venezuela's former president Nicolas Maduro, and a former White House teleprompter agreed to pay more than $172,000 to settle charges that he used advance access to President Trump's speeches to profit on Kalshi. Warren has also asked regulators to pause a bank charter for World Liberty Financial, and she has attacked the banking regulator, the OCC, for letting nine crypto firms operate like banks. Coinbase is on that list.

Read also: Prediction Markets Put Democrats at 76% Senate, 94% House in US Midterms

A chair can do a lot, but not everything. The Wall Street Journal reported that Warren will gain subpoena power, which lets a committee demand documents and testimony. Senate Banking rules from 2021 still ask for the ranking member's agreement or a majority vote before a subpoena goes out, so she cannot act alone on every request. She also cannot ban crypto or write rules by herself. The market-structure bill shows the limit. CLARITY, the bill that would set out who regulates crypto, failed a key Senate vote 49-50 on September 15. Warren brought 44 amendments to that vote, and none of them passed. Every bill that has not passed dies when this Congress ends on January 3, so CLARITY would have to start again in a Senate where Warren sets the agenda. Investment bank Stifel has already warned clients that she is set to open targeted investigations into crypto firms once she holds the gavel. Two other panels matter too: The Senate Agriculture Committee, where former Senator Sherrod Brown is set to lead, and the House Financial Services Committee, where Maxine Waters is in line to chair.

My own read is this: The headlines will move faster than the law. Hearings and subpoenas can shake a price in a day, but a bill still needs 60 votes in the Senate, and Warren does not have those on her own.

The market already flinched once

On the Thursday after the vote, stocks tumbled, and financial firms and crypto fell with them, as investors feared the new Democratic agenda would slow the artificial intelligence boom and business more widely. Bitcoin now trades near $74,700, down about 1.5% in the last day, and Ether sits near $2,126, down more than 4.5%. World Liberty's token, WLFI, traded near $0.047 in the days after the vote, close to the record low it set on November 5. Bitcoin itself is stuck ahead of this week's US inflation report, which traders are watching as the next big price trigger.

So what actually changes in January?

Three things to watch. First, January 3, when the new Congress sits and the committee lineup becomes final. Second, the first hearing Warren calls, and whether document requests land on named firms or stay general. Third, the next answer from Kalshi or Polymarket to that October 28 letter, and whether the OCC moves on any crypto bank charter, including the one Warren asked it to pause for World Liberty Financial. If the hearings start fast and the requests name firms, the market will price in a long winter for crypto in Washington. If they drag, prices can keep moving on their own news. Either way, the chair has changed, and the next two months of headlines will come from her committee.

Read also: Crypto in 401(k) Plans: Final Rule Reaches White House, $10.8 Trillion at Stake

— BitByLine News Desk

This post is news only — it is not financial advice, and it is not telling you to buy or sell anything. That call is yours, and so is the risk, so always do your own research before you act.

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Sources: The Block, The Wall Street Journal.