Incoming Fed Chair's Crypto Investments Revealed

Kevin Warsh, the nominee for Federal Reserve chair, has filed a 69-page financial disclosure that reveals his and his wife's combined assets are worth at least $192 million. Notably, the filing shows Warsh has invested in over a dozen blockchain and digital asset companies, spanning DeFi lending, decentralized derivatives, and Bitcoin payments infrastructure. He has promised to divest most of these holdings. The investments are primarily held through venture fund structures, including DCM Investments 10 LLC and a series of funds labeled AVF I, AVF II, AVF III, and AVGF I and II. Warsh's crypto holdings include stakes in DeFi protocols, Layer 1 and Layer 2 networks, Bitcoin-specific companies, and crypto investment and financial infrastructure. He has also invested in Web3, NFTs, and crypto-adjacent companies. The majority of these positions are valued at less than $1,000, but some larger investments, such as those in Juggernaut Fund LP and THSDFS LLC, will require full divestiture. The divestiture process may be complex, particularly for illiquid venture stakes. Even after selling his crypto holdings, Warsh will face a complicated recusal landscape due to federal ethics rules. The fact that Warsh has deliberately sought exposure to specific protocols, networks, and infrastructure companies affected by the Fed's regulatory and monetary policy decisions is significant. His broader financial profile, including consulting fees from prominent macro investors and speaking fees from firms with digital asset trading operations, underscores his connections to the crypto industry. Warsh's confirmation hearing is expected to take place next week, and his crypto holdings will likely be a topic of discussion. The crypto industry may view Warsh's personal venture exposure to DeFi and blockchain infrastructure as a positive sign, but the mandatory divestiture and recusal obligations may constrain his ability to act on these sympathies.