The Trump administration has granted a broad ethics waiver to David Sacks, a venture capitalist who now serves as the president’s special adviser on artificial intelligence and cryptocurrency, allowing him to engage in regulatory matters linked to his financial interests, according to a memorandum from the White House reviewed by The Lever. This waiver was issued shortly after President Donald Trump dismissed the Senate-approved director of the Office of Government Ethics, the independent body tasked with upholding federal ethics regulations.
### Ethics Waiver Details
“I am granting you a waiver… of any conflict of interest regarding particular matters of general applicability concerning the digital asset industry,” states the March 5 memo directed to Sacks by White House counsel David Warrington. Sacks, a prominent figure in the crypto sector, has previously claimed that he does not have any ongoing conflicts of interest in his governmental position. However, the memorandum highlights that Sacks has disclosed retaining financial stakes in venture capital funds that “may presently have some minor digital asset industry holdings or might in the future.”
### Financial Holdings and Potential Conflicts
Sacks has direct financial interests in several venture capital firms, including Craft Ventures, Beldore Capitol LLC, and AL Ventures. Craft Ventures, which he co-founded, maintains significant investments in various digital asset firms such as Lightning Labs and BitGo, with BitGo representing 2.4 percent of the fund’s overall portfolio, as indicated in the memorandum. Overall, crypto-related investments constitute 3.7 percent of Craft’s total assets. The memorandum acknowledges this potential conflict but concludes that these holdings are “a small fraction of your and Craft Venture’s holdings.”
### Broader Responsibilities and AI Oversight
In addition to his role in cryptocurrency regulation, Sacks is responsible for overseeing policies related to artificial intelligence technologies that are being integrated into various sectors. He is still recognized as a “cofounder and partner at Craft” on the firm’s website, which lists several portfolio companies in the artificial intelligence space. Despite these connections, the Trump administration deemed it necessary to issue the waiver, asserting that “it is difficult or impossible to predict how regulation and legislation impacting the private company interests (you own) will affect these larger nondigital interests, such as traditional non-blockchain technology companies or finance entities, not to mention manufacturing or energy entities.”
### Implications of Financial Interests
This memorandum brings to light Sacks’ financial interests across the industries he is now responsible for regulating. It is worth noting that Sacks had previously disclosed that his venture capital firm, Craft Ventures, sold over $200 million in cryptocurrency assets before he joined the Trump administration, with $85 million of that directly linked to him. This sell-off occurred as cryptocurrency values surged during Trump’s inauguration and preceded the announcement of a government initiative to establish a “Crypto Strategic Reserve” funded by taxpayer money. Sacks indicated that he had already divested from the cryptocurrencies slated for this reserve, which included Bitcoin, Ethereum, XRP, Cardano, and Solana.
### Concerns from Lawmakers
Experts assert that the federal government’s endorsement of the crypto reserve could drive up the overall market value of cryptocurrencies, potentially benefiting the digital assets held by Craft Ventures and the funds in which Sacks is still involved. Following the announcement of the crypto reserve, Senator Elizabeth Warren (D-MA) reached out to Sacks with inquiries regarding the effectiveness of this initiative and his personal financial interests related to it. At that time, the White House had not publicly authorized Sacks to engage in policy areas where he might have financial stakes. According to the waiver memorandum, should Sacks’ investments in the digital asset sector exceed five percent of his total holdings, he is required to consult with a White House ethics official.
