Kevin Warsh, the nominee to lead the Federal Reserve, has submitted his financial disclosure, revealing a complex web of investments including stakes in DeFi protocols, Ethereum scaling solutions, and Bitcoin-related startups. The disclosure, required by the US Office of Government Ethics, shows Warsh's combined assets with his wife total at least $192 million, with a significant portion tied to the crypto industry.
Warsh has invested in over a dozen blockchain and digital asset companies through various venture funds, including DCM Investments 10 LLC and a series of funds labeled AVF. His crypto holdings span multiple areas, including DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, and Bitcoin payments infrastructure. Warsh has promised to divest most of these holdings, which could potentially create conflicts of interest in his future role as Fed chair. The divestiture process may be complicated, particularly for illiquid venture stakes.
Even after selling, Warsh may face a complex recusal landscape, with federal ethics rules requiring a one-year cooling-off period for matters directly affecting recent financial interests. The discovery of Warsh's crypto holdings has significant implications for the crypto industry, as it may influence his views on regulatory and monetary policy decisions. Warsh's financial profile also underscores his connections to prominent macro investors and firms with significant digital asset trading operations, raising questions about his potential biases and ability to act impartially.