US Treasury Secretary Bessent Confirms US Lacks Authority to Use Taxpayer Funds to Bail Out Bitcoin

• The US Treasury confirms it lacks legal power to bail out Bitcoin or force banks to buy crypto.

• The US government can only hold seized Bitcoin and cannot invest taxpayer funds in digital assets.

• Lawmakers question World Liberty Financial ties while Treasury cites limits over bank charter oversight.

The U.S. Treasury Secretary, Scott Bessent, informed legislators that federal legislation prohibits Bitcoin bailout. He tackled the matter at a House Financial Services Committee hearing this week.

🚨 UPDATE: Treasury Secretary Bessent says the US Treasury has no authority to use taxpayer funds to bail out Bitcoin. pic.twitter.com/N0SL023isg

— Cointelegraph (@Cointelegraph) February 4, 2026

The exchange was received as the crypto markets were receiving fresh selling pressure. Legislators questioned the ability of the government to intervene in times of sharp price falls. However, Treasury officials stressed clear legal limits.

Treasury Cites Legal Limits on Bitcoin Support Amid Market Stress

Bessent explained that neither the Treasury Department nor the Financial Stability Oversight Council can support Bitcoin. He also ruled out using taxpayer funds for crypto purchases. Therefore, the government cannot treat Bitcoin like past crisis era rescues. This clarification reduced expectations of federal market intervention. It also reinforced boundaries around digital asset policy.

Meanwhile, market stress continued across the crypto sector. Bitcoin fell close to 8% in twenty four hours. The action drove the prices to the lowest since early November 2024. Macroeconomic issues put a strain on risk assets. As a result, investor caution increased during the session.

Limits on Bank Mandates and Public Funds

Lawmakers also questioned whether the Treasury could influence banks during crypto volatility. They raised scenarios involving reserve rules and indirect support. However, existing law prevents the Treasury from directing banks to buy cryptocurrencies. Officials stressed that private bank funds do not equal public money. Therefore, the Treasury lacks authority over such decisions.

The hearing also addressed the use of taxpayer dollars. Treasury officials confirmed that public funds cannot enter crypto markets. The government may only hold digital assets through legal forfeitures. This rule separates seized assets from budgetary spending. As a result, the Treasury cannot allocate taxes into Bitcoin. In December, lawmakers proposed a safe harbor for stablecoin payments under two hundred dollars to reduce tax burden.

Bessent also detailed the scale of seized Bitcoin holdings. Authorities retained about five hundred million dollars worth of Bitcoin. Over time, those assets increased in value to more than fifteen billion dollars. The government continues to treat the holdings as federal property. However, officials emphasized that retention does not signal investment policy.

World Liberty Financial Draws Lawmaker Scrutiny

Lawmakers later turned attention to World Liberty Financial. They raised concerns about conflicts of interest and foreign influence. Some members urged the Treasury to pause scrutiny of bank charters tied to the venture. They cited limited investor disclosure and token control issues. Reports of sharp token price declines also surfaced.

Additional concerns focused on national security risks. Lawmakers questioned potential foreign linked participation. They asked the Treasury to increase oversight and transparency. However, the Treasury declined to intervene in licensing matters. Officials noted the independence of the Office of the Comptroller of the Currency. Earlier last year, US banks asked the OCC to delay crypto trust approvals until full business plans are shared with the public.

Treasury officials stressed that they cannot direct charter approvals. The agency also cannot delay applications under its authority. This position underscored regulatory separation within the federal system. As political focus on crypto grows, oversight limits remain clear. The hearing highlighted those boundaries during ongoing market stress.