David Sacks Addresses Conflict of Interest Allegations Over U.S. Crypto Reserve

The president’s AI and crypto advisor claims to have sold his cryptocurrency holdings, yet concerns persist regarding his remaining investments.

Key Points:

• President Trump revealed plans for a federal cryptocurrency reserve, driving a sharp rise in digital asset prices.
• The reserve is set to include XRP, SOL, ADA, ETH, and BTC, all of which saw significant gains after the news.
• David Sacks, Trump’s AI and crypto advisor, asserts he sold his personal crypto holdings before joining the administration. However, his venture firm, Craft Ventures, still has investments in crypto companies, including one that holds all the tokens listed in the reserve plan.

On Sunday, President Trump’s announcement of plans to create a federal cryptocurrency reserve triggered a surge in digital asset markets. However, it also raised fresh concerns about potential conflicts of interest—specifically regarding David Sacks, the venture capitalist serving as Trump’s crypto and AI advisor.

On Sunday, President Trump announced that a future U.S. crypto reserve would include tokens such as XRP, SOL, ADA, ETH, and BTC. ADA surged 60% within minutes, while the other listed tokens also saw significant double-digit gains.

The sharp market reaction quickly sparked scrutiny over how Trump and his inner circle might personally benefit from his crypto policies. One of the most apparent beneficiaries is David Sacks, whose venture firm, Craft Ventures, has investments in Bitwise—a crypto index fund manager holding all the tokens mentioned in Trump’s statement—as well as other crypto startups. Sacks had previously disclosed personal investments in some of the same tokens highlighted by the president.

After Sunday’s announcement, David Sacks took to X to clarify his holdings, stating, “I sold all my cryptocurrency (including BTC, ETH, and SOL) prior to the start of the administration.” Responding to a community note about Craft Ventures' investment in Bitwise, he added, “I had a $74k position in the Bitwise ETF, which I sold on January 22. I do not have ‘large indirect holdings.’”

However, it remains uncertain whether Sacks still has a direct stake in Bitwise through Craft Ventures, where he is still a partner. He led the firm’s 2017 seed investment in Bitwise, and the company continues to list Bitwise in its portfolio.

A Craft Ventures representative declined to provide further details beyond Sacks’ public statements. The firm told the Financial Times on Sunday that it still holds stakes in certain cryptocurrency companies.

Bitwise, which operates multiple exchange-traded funds (ETFs), including a “10 Crypto Index Fund” containing all the tokens earmarked for Trump’s reserve, stands to benefit if these assets gain traction. The company has also applied to launch ETFs for XRP and SOL, among other tokens. If approved, these funds could see increased demand following the administration’s policy direction.

Bitwise has not responded to requests for comment.

Sacks is set to host a White House cryptocurrency summit on Friday, where further details on the administration’s crypto plans are expected to be unveiled.

Over the past year, Trump has actively sought support from the cryptocurrency industry, which has become one of the largest corporate donor groups for the 2024 election. While his anti-regulatory stance has been welcomed by some, even his pro-crypto supporters worry that emphasizing highly volatile assets like Cardano (ADA) and XRP (XRP) could undermine the industry's credibility.

Concerns over potential conflicts of interest have also arisen due to Trump's own crypto-related ventures.

In January, he launched a meme coin, TRUMP, on the Solana blockchain—the same network behind the SOL token. Additionally, World Liberty Financial (WLFI), a decentralized finance project backed by Trump and his sons, has built a treasury of crypto assets. This treasury includes several of the tokens proposed for inclusion in the federal crypto reserve, raising questions about whether price increases in these assets could directly benefit Trump.