Incoming Fed Chair's Crypto Holdings Revealed, Featuring DeFi and Blockchain Investments

Kevin Warsh, the nominee to lead the Federal Reserve, has filed his financial disclosure, revealing a complex web of investments, including those in the crypto space. The filing indicates that Warsh, through various venture fund structures, holds equity positions in multiple blockchain and digital asset companies. These investments span DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, and Bitcoin payments infrastructure. Warsh has committed to selling the majority of these holdings. As the future overseer of stablecoin regulation, bank crypto custody policy, and potential central bank digital currency decisions, Warsh's personal investments in the crypto ecosystem are of particular interest. A review of the 69-page financial disclosure document reveals that Warsh's crypto and blockchain-related holdings are concentrated 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. The identifiable crypto and blockchain positions include DeFi and trading protocols, Layer 1 and Layer 2 networks, Bitcoin-specific investments, and crypto investment and financial infrastructure. Warsh previously invested in Bitwise Asset Management, the firm behind a spot bitcoin ETF. Most of these crypto positions are small venture bets, not concentrated positions, and are reported without dollar values. However, there are larger investments that likely contain crypto exposure, including over $100 million in Juggernaut Fund LP and dozens of positions in THSDFS LLC. Warsh will be required to fully divest these holdings to comply with the Ethics in Government Act. The divestiture process may be complex, particularly for illiquid venture stakes. Even after selling, Warsh will face a complicated recusal landscape, with federal ethics rules generally requiring a one-year cooling-off period for matters directly affecting recent financial interests. This could impact the Fed's decisions on various crypto-related issues. Warsh's broader financial profile shows that he earned significant consulting fees from firms with notable digital asset trading operations and collected substantial speaking fees from various companies. Combined with his spouse's estimated $1.9 billion net worth, Warsh would be among the wealthiest Fed chairs in modern history. The Senate Banking Committee is expected to hold a confirmation hearing, and the 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 could imply more nuanced views on the technology, but the mandatory divestiture and recusal obligations may constrain his ability to act on these sympathies.