Kevin Warsh, the nominee to lead the Federal Reserve, has filed a 69-page financial disclosure, revealing a significant portfolio with at least $192 million in combined assets with his wife. Notably, Warsh holds equity positions in over a dozen blockchain and digital asset companies, including DeFi protocols, Ethereum scaling networks, and Bitcoin startups. He has pledged to divest most of these holdings. The disclosure sheds light on Warsh's personal investments in the crypto ecosystem, which could impact his decisions on stablecoin regulation, bank crypto custody policy, and central bank digital currency.
Warsh's crypto holdings are concentrated in two fund structures: DCM Investments 10 LLC and a series of funds labeled AVF. His portfolio includes stakes in DeFi and trading protocols, Layer 1 and Layer 2 networks, Bitcoin-specific companies, and crypto investment and financial infrastructure. Warsh has also invested in Bitwise Asset Management, the firm behind a spot bitcoin ETF. The majority of these crypto positions are small venture bets, but some larger investments will require full divestiture.
The sale of these stakes may be complicated due to their illiquid nature. Even after selling, Warsh will face a complex recusal landscape, with federal ethics rules requiring a one-year cooling-off period for matters directly affecting recent financial interests.
This could impact the Fed's decisions on various crypto-related issues. Warsh's broader financial profile shows that he has earned significant consulting fees from prominent investment firms with digital asset trading operations. His speaking fee circuit has also generated substantial income from various firms. Combined with his spouse's estimated $1.9 billion net worth, Warsh would be among the wealthiest Fed chairs in modern history.
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 these sympathies due to mandatory divestiture and recusal obligations.