Elizabeth Warren asks Trump's crypto czar for public disclosures
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Sen. Elizabeth Warren (D.-Mass.), ranking member, Senate Banking Committee. Photo: Al Drago/Getty
On the morning of the White House's first Digital Assets Summit Friday, Sen. Elizabeth Warren (D.-Mass.) sent a critical letter to David Sacks, the administration's crypto and AI czar, which she has shared with Axios exclusively.
The big picture: The deeper the federal government gets into supporting the blockchain industry, the more it's going to drive up values for existing holders, which raises conflict of interest questions for officials writing those policies, the senator contends.
Driving the news: In Warren's letter, the senator asks multiple pointed questions about potential conflicts of interest for Sacks and those working with him.
- She also details a variety of moves by President Donald Trump's administration that she says raise concerns about how ethically it is making decisions around this industry.
What they're saying: "Americans deserve strong leaders who will prioritize the public interest ahead of their own bottom lines. I hope you address these obvious concerns," Warren writes.
Context: Sacks is a special government employee in the administration, a status which provides him with certain exemptions under ethics rules.
- For example, the financial disclosure reports they file can be kept confidential.
Catch up quick: Sacks has been facing questions along these lines ever since the president teased the crypto reserve last weekend. In a social media post Sunday Sacks said he had sold off all his cryptocurrency holdings prior to the start of the administration.
Yes, but: There are ways to remain exposed, if somewhat more indirectly.
Zoom in: Warren points out that Sacks was a partner at Craft Ventures, which backed a handful of crypto companies such as Fold, Lightning Labs and Bitwise.
- In particular, Bitwise creates investment indices from cryptocurrencies. The five largest holdings of its Bitwise 10 index are the same five cryptocurrencies that the President identified Sunday for a coming crypto strategic reserve: bitcoin (BTC), ether (ETH), solana (SOL), xrp (XRP) and cardano (ADA).
- Those are also the five largest cryptocurrencies by market cap, if you set aside stablecoins and Binance's exchange token, BNB.
- That said, Sacks says that he has also closed out his position in that index. Craft Ventures told CoinDesk it had exited its position in the company.
The intrigue: Trump's announcement Sunday sparked a $300 billion global crypto rally, with the assets named for the reserve posting outsized gains.
- Thursday the White House announced the signing of an executive order to establish both a "Strategic Bitcoin Reserve" and a separate U.S. "Digital Asset Stockpile."
- That announcement did not name specific assets for the stockpile, and said it would be capitalized only with assets seized from criminal operations, and that the government will not seek to add to it via purchases. Prices of all five assets plummeted Thursday night on the announcement.
Warren's letter asks for the identities of anyone who helped Trump determine the assets identified Sunday, and of them, how many were subject to conflict of interest laws.
- She also asks Sacks whether anyone who had worked on the reserve policy had made relevant trades prior to the announcement.
What we're watching: Warren has asked Sacks to publicly disclose whatever report he personally filed with the Office of Government Ethics.
- She's also asked for a number of other assurances, such as proof that he has exited personal investments in the named cryptocurrencies and any ethics waivers he may have sought or topics that he has recused himself from working on.
