Kevin Warsh, the nominee to lead the Federal Reserve, has filed a 69-page financial disclosure form, revealing a complex web of investments, including those in the crypto space. The filing, which is required by the U.S.
Office of Government Ethics, shows that Warsh has significant assets, with a combined total of at least $192 million with his wife. However, it is his investments in crypto and blockchain companies that are likely to draw the most attention. Warsh has equity positions in over a dozen companies, spanning 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 form 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.
Warsh's investments in the crypto space are not limited to these funds, as he has also previously invested in Bitwise Asset Management, the firm behind a spot bitcoin ETF. The majority of Warsh's crypto positions are valued at less than $1,000, but he also holds larger stakes in Juggernaut Fund LP and THSDFS LLC, which will require full divestiture.
The divestiture of these holdings could be complex, particularly for illiquid venture stakes. Even after selling his crypto holdings, 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 act on crypto-related matters, at least in the first year.
The revelation of Warsh's crypto investments has significant implications for the crypto industry, as it may indicate a more nuanced understanding of the technology among regulators. However, the mandatory divestiture and recusal obligations could constrain Warsh's ability to act on these sympathies. The Senate Banking Committee is expected to hold a confirmation hearing for Warsh next week, where his crypto holdings are likely to be a topic of discussion.