PancakeSwap faces improper political interference! US lawmakers call for investigation into Trump's crypto plans

U.S. Senator Elizabeth Warren has sent a letter to the Secretary of the Treasury and the Attorney General, requesting a national security investigation into PancakeSwap and its business interests related to President Trump. She pointed out that PancakeSwap is attempting to amplify tokens issued by World Liberty Financial (WLFI), which is connected to Trump, raising questions about potential improper political influence in law enforcement decisions by the Trump administration.

Trump Crypto Empire: The Controversial Connection Between WLFI and PancakeSwap

To understand why Warren singled out PancakeSwap, it is necessary to first grasp Trump’s business layout in the crypto industry. World Liberty Financial (WLFI) is a crypto project directly linked to President Trump, and its issued tokens recently gained significant liquidity support on PancakeSwap. As a major DeFi protocol on Binance Smart Chain (BNB Chain), operating across multiple blockchains, PancakeSwap’s support for WLFI tokens has raised political sensitivity issues.

In her letter to Treasury Secretary Scott Bessent and Attorney General Pam Bondi, Warren explicitly states that PancakeSwap is “attempting to amplify” WLFI tokens associated with Trump, which could involve conflicts of interest. She questions why a decentralized exchange would specifically “favor” a project related to the President. Does this imply that the Trump administration has exerted pressure on PancakeSwap and its underlying entities or provided regulatory exemptions in exchange?

This is not the first time Warren has targeted Trump’s crypto interests. Last month, she participated in a similar call for an investigation into WLFI. Including PancakeSwap in this investigation indicates that the Democratic Party is trying to build a more comprehensive narrative of the “Trump crypto interest chain.” From WLFI’s token issuance, to PancakeSwap’s liquidity support, and potential regulatory favors, Warren aims to outline a full picture of conflicts of interest.

However, Trump’s own government is unlikely to respond to requests to investigate the President’s business interests. White House officials and Trump himself continue to assert that his crypto relationships do not constitute conflicts of interest. Legally, this position has some basis, as U.S. presidents enjoy certain exemptions under conflict of interest laws. But politically, the role of “judge and player at the same time” has indeed sparked widespread skepticism.

DeFi Regulation Becomes the Major Controversy in Crypto Legislation

Warren’s call for an investigation is not an isolated event but part of a larger political game in the negotiations over the Market Structure Bill. She criticizes DeFi platforms for “facilitating hundreds of millions of dollars in daily transactions without requiring users to register or provide any identification.” This criticism directly targets DeFi’s core features—decentralization and permissionless access—and frames it as a national security threat.

DeFi regulation remains one of the key issues both parties need to resolve in the Market Structure Bill. Crypto insiders describe this as a “red line” issue that could determine whether the industry supports the final legislation. For pro-crypto Republicans and moderate Democrats, overly strict DeFi regulation could stifle innovation and push business overseas. But for Democrats like Warren and progressive factions, DeFi platforms without KYC (Know Your Customer) requirements are seen as hotbeds for money laundering and terrorist financing.

The controversy has become even more complicated after the exposure of the connection between Trump and PancakeSwap. If a project related to the President is leveraging DeFi platforms, does lenient regulation of DeFi imply that the President is serving his own business interests? This is precisely the political narrative Warren is trying to construct.

Warren’s Core Allegations Against DeFi Platforms

Lack of Identity Verification: PancakeSwap and other DeFi platforms “facilitate hundreds of millions of dollars in daily transactions without requiring users to register or show any ID”

National Security Risks: Potentially being “used by terrorists, criminals, and rogue states” to fund activities

Political Influence: Connected to “undue political influence” on law enforcement decisions of the Trump government

Regulatory Arbitrage: Exploiting decentralized architecture to evade traditional financial regulations

Conflict of Interest: Providing special support to Trump-related projects, raising questions of conflicts of interest

Delays in Crypto Legislation Negotiations: Trump Factor as a Key Variable

Senate Banking Committee Chair Tim Scott has confirmed that negotiations on the Market Structure Bill have failed to meet industry expectations for action before the end of the year, and will be postponed to January for committee review. Part of this delay is attributed to DeFi regulation disputes, and the Trump-PancakeSwap connection has further worsened the situation.

Warren has been nearly marginalized in the Senate Banking Committee, as many Democratic colleagues have agreed to negotiate with Republicans on the bill. However, she continues to “throw rhetorical sand into the negotiations,” using the controversy over Trump and PancakeSwap to delay legislative progress. While this strategy may not prevent the bill’s eventual passage, it is enough to force concessions on DeFi regulation and conflict of interest provisions.

This is another contentious point in the Market Structure Bill negotiations—Democrats demand banning senior government officials from pursuing commercial interests in the crypto industry. Although both sides express confidence that a compromise bill can be reached in the Senate, the White House has rejected some preliminary proposals. Trump’s administration explicitly opposes any clauses restricting its crypto activities, raising doubts about resuming negotiations next month.

If negotiations are delayed for several weeks, they could clash with the Congressional budget negotiations, which are set to climax before the January 30 deadline. Last time, budget disputes led to a government shutdown for weeks and further delayed crypto legislation. For the crypto industry, this uncertainty could be the worst outcome—lacking clear regulatory frameworks while facing political attacks and investigation threats.

As one of the largest decentralized exchanges globally, PancakeSwap now finds itself at the center of U.S. political struggles. Does the platform truly give special treatment to Trump-related projects? Or is it simply providing liquidity naturally due to market demand? The answers to these questions will influence the future regulation of the entire DeFi industry. If Warren’s investigation call is responded to, PancakeSwap could become the first DeFi platform to face regulatory scrutiny due to its association with Trump, setting a dangerous precedent for the entire industry.