Kevin Warsh, the nominee to lead the Federal Reserve, has submitted his financial disclosure, revealing a vast portfolio with combined assets of at least $192 million. Notably, his holdings include investments in over a dozen blockchain and digital asset companies, spanning DeFi lending, decentralized derivatives, and Bitcoin payments infrastructure.
Warsh has committed to divesting most of these holdings, which could impact his decision-making as the regulator of stablecoins, bank crypto custody policies, and central bank digital currencies. His portfolio includes investments in Layer 1 and Layer 2 networks, Bitcoin-specific companies, and crypto investment firms.
The disclosure also shows that Warsh previously invested in Bitwise Asset Management, a firm behind a spot bitcoin ETF. The majority of Warsh's crypto positions are held within fund vehicles with individual line items reported without dollar values, indicating they are small venture bets. However, he also holds larger positions in funds like Juggernaut Fund LP and THSDFS LLC, which will require full divestiture.
The sale of these positions may be complicated due to their illiquid nature. Even after divestment, Warsh will face a complex recusal landscape, with federal ethics rules requiring a one-year cooling-off period for matters directly affecting his recent financial interests.
This could impact his involvement in regulatory decisions related to the crypto industry. Warsh's deliberate pursuit of exposure to specific protocols, networks, and infrastructure companies is notable, as is his broader financial profile, which includes significant income from consulting fees and speaking engagements with firms involved in digital asset trading.
His combined wealth with his spouse, estimated to be over $2 billion, would make him one of the wealthiest Fed chairs in history. The Senate Banking Committee is expected to hold a confirmation hearing next week, where Warsh's crypto holdings are likely to be discussed.
The crypto industry may view Warsh's disclosure as a mixed signal, as his personal investment experience could bring nuance to regulatory decisions, but his mandatory divestiture and recusal obligations may limit his ability to act on these sympathies.