Sacks & his VC Firm Sell Crypto Ahead of Trump Inauguration to Avoid Conflict

A newly disclosed memorandum reveals that Sacks and his firm divested over $200 million in digital assets and crypto-related stocks before he formally assumed his role as the White House AI and crypto czar.

According to the memorandum, dated March 5, Sacks personally liquidated $85 million worth of cryptocurrency holdings, including Bitcoin (BTC), Ether (ETH), and Solana (SOL). 

Additionally, Craft Ventures sold its crypto-related investments, including stakes in publicly traded firms such as Coinbase (COIN) and Robinhood (HOOD), as well as positions in private digital asset companies. 

Sacks also divested his limited partner interests in the Solana-focused Multichain Capital and the crypto-centric venture capital firm Blockchain Capital. Craft Ventures further offloaded holdings in Multichain Capital and Bitwise Asset Management.

The decision to liquidate these holdings was made in an effort to mitigate potential conflicts of interest, given that Sacks’ new role involves shaping policies and regulations for the cryptocurrency industry. 

The sell-off took place before Donald Trump’s inauguration on January 20, a day that marked a peak in the crypto market, with Bitcoin reaching a new all-time high of $109,000. 

However, following Trump’s inauguration, the crypto market experienced a sharp downturn, with Bitcoin recently dipping below $80,000 before recovering to approximately $84,155, according to CoinMarketCap data.

Despite these preemptive divestments, Massachusetts Senator Elizabeth Warren has demanded further transparency from Sacks. In a letter dated March 6, Warren called on Sacks to provide proof that he no longer holds any digital assets. 

She questioned the timing of his personal divestments, the sale of Craft Ventures’ stakes in crypto firms, and whether individuals close to him may have profited from the recent surge in crypto prices before the market downturn.

Sacks, since stepping into his role as the White House crypto czar, has been an outspoken advocate for various industry issues, including the establishment of a Strategic Bitcoin Reserve and policies that promote growth rather than excessive taxation. 

He recently criticized a proposed 0.01% tax on crypto transactions during an episode of the All In Podcast, arguing that even seemingly small taxes have historically expanded into larger, burdensome policies.

“That’s always how taxes start. They are described as being very modest,” Sacks said. “When the income tax was first introduced, it only applied to about a thousand Americans, and legislators swore up and down that it would never extend to the middle class. Yet, here we are.”

As Sacks continues to shape crypto policy in the White House, scrutiny over his past financial activities is likely to persist, particularly as lawmakers and regulators push for greater oversight in the digital asset sector.