Kevin Warsh, the nominee to lead the Federal Reserve, has filed a 69-page financial disclosure document, revealing a complex web of investments, including those in the cryptocurrency space. The filing indicates that Warsh, through various venture fund structures, holds equity positions in over a dozen blockchain and digital asset companies, spanning DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, and Bitcoin payments infrastructure.
Warsh has committed to divesting the majority of these holdings. The disclosure provides insight into the financial interests of the individual who will oversee stablecoin regulation, bank crypto custody policy, and potential central bank digital currency decisions.
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. His investments include DeFi and trading protocols, Layer 1 and Layer 2 networks, Bitcoin-specific companies, and crypto investment and financial infrastructure. Warsh previously invested in Bitwise Asset Management, the firm behind a spot bitcoin ETF.
Most of Warsh's crypto positions are small, worth less than $1,000, but he also holds larger, opaque positions in Juggernaut Fund LP and THSDFS LLC, which will require full divestiture. The sale of these positions may be complicated due to their illiquid nature. Even after divestment, Warsh will face a complex recusal landscape, with a one-year cooling-off period for matters directly affecting his recent financial interests.
The discovery of Warsh's crypto investments has sparked interest, given the potential impact of his regulatory and monetary policy decisions on the companies in which he has invested. Warsh's financial profile is further underscored by his earnings from consulting fees and speaking engagements with prominent investment firms. His combined wealth with his spouse, Jane Lauder, would make him one of the wealthiest Fed chairs in modern history. A confirmation hearing is expected to be held next week, where Warsh's crypto holdings are likely to be discussed.
The crypto industry views the Warsh disclosure as a double-edged signal, potentially indicating a more nuanced understanding of the technology, but also raising concerns about mandatory divestiture and recusal obligations.