Incoming Fed Chair's Portfolio Reveals Crypto Holdings, Promising Divestment

Kevin Warsh, the nominee for the Federal Reserve chair, has filed a 69-page financial disclosure form, revealing his combined assets with his wife to be at least $192 million. Notably, his portfolio includes investments in over a dozen blockchain and digital asset companies, spanning DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, and Bitcoin payments infrastructure. Warsh has pledged to divest most of these holdings. The disclosure form, reviewed by CoinDesk, lists his crypto and blockchain-related holdings in two fund structures: DCM Investments 10 LLC and a series of funds labeled AVF I, AVF II, AVF III, and AVGF I and II. Warsh's investments include DeFi and trading protocols, Layer 1 and Layer 2 networks, Bitcoin-specific companies, crypto investment and financial infrastructure, and Web3, NFTs, and crypto-adjacent companies. His previous investment in Bitwise Asset Management, the firm behind a spot bitcoin ETF, is not included in the current disclosure. Most of Warsh's crypto positions are reported without dollar values, indicating they are small venture bets worth less than $1,000. However, he holds over $100 million in Juggernaut Fund LP and dozens of positions in THSDFS LLC, which will require full divestiture. The divestiture of these holdings, particularly the illiquid venture stakes, may pose challenges. Warsh will face a complicated recusal landscape, with federal ethics rules requiring a one-year cooling-off period for matters directly affecting recent financial interests. This could impact his involvement in the Fed's regulatory and monetary policy decisions on crypto. Warsh's deliberate pursuit of exposure to specific protocols, networks, and infrastructure companies is notable, particularly given his broader financial profile. He has earned significant consulting fees from prominent macro investors and firms with digital asset trading operations. The Senate Banking Committee is expected to hold a confirmation hearing next week, where Warsh's crypto holdings will likely be a topic of discussion. The crypto industry may view Warsh's disclosure as a double-edged signal, as his personal venture exposure to DeFi and blockchain infrastructure may indicate nuanced views on the technology, but the mandatory divestiture and recusal obligations could constrain his ability to act on these sympathies.