Kevin Warsh, the nominee to lead the Federal Reserve, has submitted his financial disclosure, revealing a complex web of investments in the cryptocurrency space. The 69-page document outlines combined assets with his wife totaling at least $192 million, with a significant portion invested in over a dozen blockchain and digital asset companies. Warsh's portfolio includes equity positions in DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, and Bitcoin payments infrastructure. He has promised to divest most of these holdings.
The disclosure has sparked interest in the crypto industry, given Warsh's potential role in overseeing stablecoin regulation, bank crypto custody policy, and central bank digital currency decisions. Warsh's investments 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.
His crypto and blockchain-related holdings 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 his crypto positions are small venture bets, but he also holds larger stakes in funds with underlying assets shielded by confidentiality agreements.
Warsh will be required to 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 requiring a one-year cooling-off period for matters directly affecting recent financial interests. This could impact his ability to weigh in on key regulatory decisions. Warsh's broader financial profile reveals significant earnings from consulting fees and speaking engagements with firms involved in digital asset trading operations. His net worth, combined with his spouse's estimated $1.9 billion, would make him one of the wealthiest Fed chairs in modern history.
The Senate Banking Committee is expected to hold a confirmation hearing next week, where Warsh's crypto holdings are likely to be questioned. The disclosure has sent a mixed signal to the crypto industry, with some seeing it as a positive sign that the incoming Fed chair has a nuanced understanding of the technology, while others are concerned about potential conflicts of interest and the impact of mandatory divestiture and recusal obligations on his ability to act.