Kevin Warsh, the nominee to lead the Federal Reserve, has submitted his financial disclosure, revealing a vast portfolio with significant crypto exposure. The 69-page document, filed with the US Office of Government Ethics, shows Warsh's combined assets with his wife total at least $192 million.
Notably, his investments include stakes 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 promised to divest most of these holdings. The disclosure highlights the complexity of Warsh's financial interests, which could impact his decisions as Fed chair, particularly regarding 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 investments include positions in DeFi and trading protocols, Layer 1 and Layer 2 networks, Bitcoin-specific companies, crypto investment and financial infrastructure, as well as Web3, NFTs, and crypto-adjacent firms. Warsh previously invested in Bitwise Asset Management, the firm behind a spot bitcoin ETF, although this position is not included in the current disclosure. Most of Warsh's crypto positions are small venture bets, but he also holds larger stakes in funds with underlying assets shielded by confidentiality agreements.
These will require full divestiture, which may be challenging due to the illiquid nature of some venture stakes. The divestiture and recusal obligations could constrain Warsh's ability to act on his sympathies towards the crypto industry, at least in the first year. The Senate Banking Committee is expected to hold a confirmation hearing next week, where Warsh's crypto holdings will likely be a topic of discussion. The crypto industry views Warsh's disclosure as a double-edged signal, potentially indicating a more nuanced understanding of the technology, but also raising concerns about his ability to act on those sympathies due to mandatory divestiture and recusal obligations.