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  • ⚖️ A criminal probe hits the Fed. Markets question control.

⚖️ A criminal probe hits the Fed. Markets question control.

Powell under DOJ scrutiny. PLUS: massive token unlocks loom, meme coins collapse at record scale, USDT underpins Venezuela’s economy, Monero surges, and rare earths ignite a new Arctic standoff.

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Cryptopolitan News
January 12, 2026 • Estimated Reading Time: 9 minutes

Powell criminal probe. Is the Fed now controlled by the State?

The U.S. Federal Reserve has entered unchartered waters.

Federal prosecutors have launched a criminal investigation of Jerome Powell, ensnaring the Fed chair in a Justice Department fight over escalating costs at the central bank’s Washington headquarters.

Central to the investigation: whether Powell deceived Congress about how much the project cost.

What triggered the investigation?

The renovations of two historic Fed buildings were originally budgeted at $1.9 billion beginning in 2023. Revised budget documents for 2025 now peg the cost at $2.5 billion largely due to increasing mechanical, electrical and plumbing costs.

People familiar with the matter say prosecutors are examining Powell’s testimony to Congress in June 2025, when he talked about the renovation. The inquiry was authorized in November by the U.S. Attorney’s Office for the District of Columbia.

There’s no public confirmation that an indictment has been handed up, but the prosecutors have subpoenaed documents from the Fed and at this point grand jury activity is simply acknowledged.

Why politics is coming into play

In July 2025, Trump’s budget director, Russell Vought, officially blamed Powell for mismanaging the renovation. Trump later called for Powell’s resignation and noted that he already has his successor chosen when Powell’s term expires in May 2026.

Kevin Hassett is now the favorite to replace him, according to prediction markets.

Powell pushes back

On Sunday, Powell said the Fed got subpoenas from the Justice Department. He cautioned that the investigation, now in its fourth month, may be going too far.

❝

This should be viewed in the broader context of ongoing pressure from the administration

Powell said, contending that the probe is being used to shape interest rate policy.

In brief: Powell is saying it’s not just a building. It’s about control.

🧠 Quick Explainers

Who is to defend the Fed?

The Fed is supposed to be independent. Its leadership is appointed by the president, but is protected by fixed terms during which its leaders cannot be replaced over policy disagreements.

This independence is to shield interest-rate decisions from elections, politics and short-term pressure.

Can the courts remove or undermine the Fed Chair?

Courts don’t determine interest rates, but criminal proceedings can undercut the authority of a Fed Chair. Subpoenas, hearings and public scrutiny can damage credibility, alter market expectations and make leadership untenable, a less formal verdict of guilt or innocence notwithstanding.

That’s why this investigation is important well beyond the cost of renovation.

Poll: What do you think this investigation really means?

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Why markets are paying attention

If investors start to suspect that the Fed is not acting independently, confidence in U.S. monetary policy will diminish. That traditionally drives capital into hard assets like gold and crypto, particularly Bitcoin.

This is all less about Powell as an individual and more about whether the Fed can act independently.

📊 Market Watch

💸 $1.69B in token unlocks led by ONDO and TRUMP

ONDO is in front of the cliff unlocks and issuing 1.94B tokens valued at $772.42m – more than 57% of adjusted released supply.” TRUMP is the next highest, with a total of $299.17M unlocked across cliff and linear types accounting for 27% of circulating supply.

💀 11.6M tokens died in 2025

Meme coins paved the way as more than 11.6 million crypto tokens flopped in 2025, greater than 86% of all such flops over the past five years combined, according to a new CoinGecko report.

Launch platforms like Pump.fun inundated the market with low-effort tokens, but very few ever survived their first month.

And yet, in 2025 more than 20 million tokens were introduced, reflecting the fact that speculative creation has not abated, even as survivability has.

🇻🇪 Venezuela runs on Tether

Oil payments in Venezuela continue even as Maduro is arrested and U.S. sanctions get tighter, courtesy of USDT.

The national oil company employs Tether to circumvent a dysfunctional banking system, with 80% of oil revenue now moving through stablecoins.

When the local currency crumbled, ordinary Venezuelans In use USDT to survive, buying groceries or bubble gum or haircuts with digital wallets.

 👀 Chart our Analyst is watching

Monero (XMR) hit a all‑time high at $595, extending one of the strongest uptrends in crypto right now.

 🐥 Top tweets

🌎 Geopolitics Watch

Greenland? Not just ice and isolation anymore, it’s a flash point.

China already has an interest and investments in Greeland’s rare earths, such as China-backed firm Shenghe Resources holding 12.5% in the giant Kvanefjeld mine that it took a stake in back early days of 2018. Now Trump wants it too, and he wants it fast.

He’s saying this is a national security issue. China controls rare earth processing. Greenland holds untapped, high-grade supply. The United States has an opportunity to cut dependence, build A.I.-scale infrastructure and exploit the Arctic.

But Denmark’s resisting. Greenland’s leaders are furious. Europe’s rattled. And Trump? “We’ll go the hard way if we have to.”

Minerals. Missiles. Morality. In the ice, perhaps, a new Cold War is about to start.

POLL: Do you think US will acquire Greenland in 2026?

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