Kevin Warsh, the nominee for the Federal Reserve chair, has filed a 69-page financial disclosure, revealing a vast portfolio that includes significant stakes in cryptocurrency and blockchain companies. The filing indicates that Warsh, through various venture funds, holds equity positions in over a dozen companies involved in DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, and Bitcoin payments infrastructure. Notably, he has promised to sell the majority of these holdings.
The disclosure has sparked interest in the crypto industry, given Warsh's potential influence on stablecoin regulation, bank crypto custody policy, and central bank digital currency decisions. Warsh's crypto holdings are primarily 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 portfolio includes investments in DeFi protocols, Layer 1 and Layer 2 networks, Bitcoin-specific companies, and crypto investment and financial infrastructure. Additionally, Warsh has 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, indicating they are relatively small venture bets. However, he also holds larger, more opaque positions in Juggernaut Fund LP and THSDFS LLC, which will require full divestiture.
The mandatory divestiture and recusal obligations may constrain Warsh's ability to act on his sympathies towards the crypto industry, at least in the first year. The disclosure has also raised questions about potential conflicts of interest, given Warsh's deliberate exposure to specific protocols, networks, and infrastructure companies that the Fed's regulatory and monetary policy decisions will directly affect. Warsh's broader financial profile, including his earnings from consulting fees and speaking engagements, underscores his significant wealth and potential influence. The Senate Banking Committee is expected to hold a confirmation hearing next week, where Warsh's crypto holdings are likely to be a topic of discussion.