Controversy Surrounds David Sacks Amid Trump’s Crypto Reserve Proposal
This week, David Sacks, who serves as President Donald Trump’s appointed czar for cryptocurrency and artificial intelligence, found himself embroiled in a significant controversy. The scrutiny arose following claims suggesting that he might stand to gain financially from Trump’s recent announcement regarding the establishment of a U.S. strategic cryptocurrency reserve. This initiative, unveiled by Trump on Sunday, aims for the government to hold a reserve of various digital assets, including Bitcoin (BTC), Ethereum (ETH), XRP, Cardano (ADA), and Solana (SOL).
Critics voiced their concerns, highlighting that members within the administration, particularly those with established ties to these digital currencies, could potentially profit from such a policy. Sacks, a well-known venture capitalist with a history of investments in the cryptocurrency sector, quickly became a central figure in this unfolding drama. Over the weekend and into Monday, he took to X (formerly known as Twitter) to refute the allegations of any financial stake in the proposed policy, asserting that he had divested from all his personal cryptocurrency holdings prior to joining the administration. This included a significant divestment from Multicoin Capital, a prominent investment firm focused on the crypto market.
However, lingering questions arose regarding whether Craft Ventures, Sacks’ own venture capital firm, had maintained any investment in Bitwise, a company specializing in cryptocurrency index funds that Sacks had helped finance back in 2017. Notably, Bitwise manages investment products that include an ETF containing all the assets outlined in Trump’s strategic reserve plan, leading to speculation that the firm could benefit from potential government purchases of these cryptocurrencies.
On Tuesday, a source closely associated with Craft Ventures confirmed to CoinDesk that the firm had indeed exited its position in Bitwise prior to the commencement of Trump’s second administration. Additionally, the Craft Ventures website was updated on the same day to reflect that the exit from Bitwise was finalized in January 2025. Despite this clarification, neither Craft Ventures, Bitwise, nor Sacks have publicly addressed the situation regarding the apparent exit.
The source revealed that Craft Ventures had chosen to remain silent on the matter to avoid complicating Sacks’ ongoing government clearance process. In his defense on social media, Sacks dismissed the entire situation, stating, “The accusation that people who are already very successful in business go into government to make more money is a lazy and stupid narrative. As I’ve learned, serving in government involves substantial disruption and divestiture of one’s business interests.”
The debate surrounding Trump’s proposed crypto reserve continues to polarize opinions within the cryptocurrency community. Supporters of the president argue that a reserve composed solely of Bitcoin would be more advantageous, while others question the appropriateness of government involvement in digital asset management, asserting that such intervention contradicts the fundamental decentralized ethos of the industry. Furthermore, conflict of interest concerns are not limited to Sacks; questions also loom over Trump himself. Notably, the Trump-backed cryptocurrency startup, World Liberty Financial, reportedly holds a treasury of approximately $500 million in crypto assets, which includes several of the currencies mentioned in his reserve announcement.
