David Sacks Quietly Exits Crypto Company Caught in Conflict of Interest
Sachs' venture firm Craft Ventures has left Bitwise ahead of the new administration, according to a person familiar with the matter.
Sam Kessler | Edited by Nikhilesh De Updated Mar 4, 2025 21:39 UTC Published Mar 4, 2025 21:25 UTC
Key points:
- Allegations have emerged that David Sachs may have benefited from US President Donald Trump's proposed strategic cryptocurrency reserve after Trump included five cryptocurrencies in it on Sunday.
- Sachs denied any conflict of interest, saying he divested his cryptocurrency holdings before taking on his role as Trump's crypto adviser.
- Craft Ventures' exit from Bitwise was confirmed after an investigation into its links to tokens mentioned in Trump's plan.
David Sachs, the top cryptocurrency and artificial intelligence expert in President Donald Trump's administration, came under fire this week after allegations that he stood to benefit financially from Trump's announcement of a U.S. strategic cryptocurrency reserve.
The initiative, which Trump detailed on Sunday, would involve the government holding a reserve of digital assets such as Bitcoin (BTC), Ethereum (ETH), XRP, Cardano (ADA) and Solana (SOL). Critics have expressed concern that individuals in the administration with ties to these assets could benefit from the move.
Sacks, a venture capitalist with previous cryptocurrency investments, quickly found himself at the center of the controversy. Over the weekend and on Monday, he responded on X (formerly Twitter) to deny that he had a financial stake in the policy. He said he had divested all of his personal cryptocurrency-related assets before joining the administration, including his stake in Multicoin Capital, a cryptocurrency investment firm.
One ongoing question, however, is whether Craft Ventures, Sachs’ venture capital firm, still has an investment in Bitwise, the cryptocurrency index fund manager that Sachs helped fund in 2017. Bitwise’s investment products include an ETF that holds all the assets mentioned in Trump’s strategic reserve plan, raising concerns that the company could benefit from the government’s cryptocurrency purchases.
On Tuesday, a source close to Craft Ventures confirmed to CoinDesk that the fund had exited its position in Bitwise before the start of the second presidential administration. Craft Ventures’ website was also updated on Tuesday to reflect that it had exited its investment in Bitwise in January 2025.
Craft Ventures, Bitwise, and Sachs have yet to publicly comment on their apparent exit. A source familiar with Craft Ventures told CoinDesk that the firm did not comment publicly to avoid disrupting Sachs’s government approval process, which is currently ongoing.
In his defense on social media, Sachs denied all the accusations. “The idea that people who have already achieved great success in business go into government to make more money is a lazy and stupid myth,” he wrote. “As I have learned, serving in government requires significant sacrifice and abandonment of business interests.”
The debate over Trump's proposed reserve continues to divide the crypto community, with some of the president's crypto supporters arguing that the reserve,
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