Treasury Declares No Bitcoin Bailout: Markets Stunned

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Secretary Scott Bessent, a chap who packs more forms into a morning than a magician packs rabbits into a hat, told the lawmakers this week that the federal government hasn’t the legal wherewithal to swoop in and rescue Bitcoin or to browbeat banks into stocking up on cryptocurrencies.

  • Secretary Bessent said the federal government has no legal authority to bail out Bitcoin or compel banks to buy cryptocurrencies, ruling out taxpayer-funded intervention during market downturns.
  • Lawmakers grilled Bessent about World Liberty Financial, a Trump-connected crypto venture, with Democrats urging heightened scrutiny of any banking applications tied to potential conflicts of interest or foreign influence.
  • The testimony comes as Bitcoin slid nearly 8% in 24 hours, hitting its lowest level since early November 2024 amid broader market uncertainty and risk-off sentiment.

He reminded the room-quite softly, as one might remind a cat that has knocked over the vase-that the government’s reach stops at the statute book and at the pen, not at the tender mercies of volatile markets.

U.S. Treasury Rules Out a Bitcoin Bailout

During a House Financial Services Committee session, California Representative Brad Sherman pressed Bessent on whether the Treasury Department or the Financial Stability Oversight Council could dip into taxpayer funds to prop up Bitcoin during a downturn.

Bessent replied, with the calm certainty of a man who has heard the same tune before, that neither he nor the council possesses such authority.

“I am Secretary of the Treasury, I do not have the authority to do that, and as chair of FSOC, I do not have that authority,” Bessent said.

Bessent’s testimony clarified that while the U.S. government may retain Bitcoin obtained through legal forfeitures, it cannot mandate banks to buy Bitcoin or invest U.S. tax dollars in cryptocurrencies. In short, bailout fantasies-like some ill-advised wigs-are firmly, if politely, off the table.

Bessent also mentioned that the $500 million in seized Bitcoin held by the U.S. government has surged to over $15 billion while in custody, a number that could make even a good accountant raise an eyebrow and a lorgnette.

The Treasury Secretary additionally faced pointed questions about World Liberty Financial, a crypto and decentralized finance venture tied to President Donald Trump. Representative Gregory Meeks urged pausing and intensifying scrutiny of any bank charter or license application tied to World Liberty until conflicts of interest and potential foreign influence are fully reviewed and shared with Congress.

Bessent declined, noting that the Office of the Comptroller of the Currency (OCC), the agency that would approve banking charters, is an independent regulator and not under Treasury control.

Bitcoin’s Price Slide Deepens Amid Market Uncertainty

The remarks came amid a sharp sell-off in the cryptocurrency market. Bitcoin’s price has fallen nearly 8% in the last 24 hours, dragging the world’s largest cryptocurrency to its lowest level since early November 2024 as investor sentiment turns cautious, like a railway porter eyeing a queue that simply will not move.

The broader market stress, including macroeconomic concerns and shifting risk appetites, has compounded selling pressure.

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2026-02-05 11:44