Kevin Warsh, the nominee for Federal Reserve chair, has submitted his financial disclosure, revealing a complex web of investments, including those in cryptocurrency and blockchain companies. The disclosure, which is required by the US Office of Government Ethics, shows that Warsh has equity positions in over a dozen companies involved in decentralized finance, or DeFi, Ethereum scaling networks, Bitcoin payments infrastructure, and other areas of the crypto ecosystem. Warsh has stated that he will divest the majority of these holdings to avoid potential conflicts of interest. The revelation has sparked interest and concern, as Warsh will be responsible for overseeing stablecoin regulation, bank crypto custody policy, and any future 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. The disclosure also shows that Warsh has previously invested in Bitwise Asset Management, a firm behind a spot bitcoin ETF.
Warsh's crypto holdings are mostly small venture bets, but there are larger positions in funds whose underlying assets are not publicly disclosed. The sale of these holdings may be complicated due to their illiquid nature.
The conflict of interest rules may require Warsh to recuse himself from matters directly affecting his recent financial interests for a period of one year. The situation has raised questions about Warsh's ability to navigate the complex regulatory landscape of cryptocurrencies and blockchain technology. Warsh's financial profile also shows that he has earned significant consulting fees from prominent investment firms, including Duquesne Family Office, GoldenTree Asset Management, and Cerberus Capital Management, all of which have significant digital asset trading operations.
His net worth, combined with that of his spouse, would make him one of the wealthiest Fed chairs in modern history. The Senate Banking Committee is expected to hold a confirmation hearing for Warsh next week, during which his crypto holdings are likely to be a topic of discussion.