The recent announcement of a potential U.S. strategic crypto reserve by President Donald Trump has sparked intense debate and raised significant conflict of interest questions, particularly surrounding David Sacks, a key figure in the administration’s technology and crypto strategy.
The Strategic Crypto Reserve Proposal
President Trump’s Sunday announcement outlined an ambitious plan for the U.S. government to establish a strategic digital asset reserve. The proposed reserve would include multiple cryptocurrencies:
- Bitcoin (BTC)
- Ethereum (ETH)
- XRP
- Cardano (ADA)
- Solana (SOL)
Conflict of Interest Allegations
Critics immediately raised concerns about potential financial conflicts of interest within the administration. The central focus quickly became David Sacks, a prominent venture capitalist with a history of crypto investments.
Sacks’ Initial Response
Sacks was quick to respond to the allegations on social media platform X (formerly Twitter). He emphatically denied any financial interest in the proposed policy, asserting that he had divested from all personal crypto-related holdings before joining the administration. This included his stake in Multicoin Capital, a crypto-focused investment firm.
The Bitwise Connection
One critical question remained: Had Craft Ventures, Sacks’ venture capital firm, maintained its investment in Bitwise, a crypto index fund manager Sacks had helped fund in 2017? Bitwise’s investment products include an ETF that precisely matches the cryptocurrencies mentioned in Trump’s strategic reserve plan.
Quiet Divestment
A source close to Craft Ventures confirmed to CoinDesk that the fund had exited its Bitwise position before the start of the President’s second administration. The Craft Ventures website was updated in January 2025 to reflect this divestment.
Sacks’ Public Statement
In a defiant social media post, Sacks dismissed the controversy, 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.” He emphasized the substantial personal and professional disruption involved in government service.
Broader Crypto Community Reactions
The proposed crypto reserve has divided the crypto community. Debates continue around several key points:
- Some supporters advocate for a Bitcoin-only reserve
- Others question the very premise of government involvement in digital assets
- Concerns persist about how government intervention might conflict with crypto’s decentralized principles
Additional Context: World Liberty Financial
Adding another layer of complexity, the Trump-backed crypto startup World Liberty Financial holds approximately $500 million in crypto assets, including those listed in the proposed reserve announcement.
Ongoing Considerations
As Sacks’ government clearance process continues, both Craft Ventures and Bitwise have remained publicly silent about the divestment, reportedly to avoid disrupting the ongoing clearance procedures.
The controversy highlights the intricate relationships between private sector tech and venture capital leaders and government policy, particularly in the rapidly evolving cryptocurrency landscape. As the strategic crypto reserve proposal moves forward, scrutiny of potential conflicts of interest is likely to intensify. Check cryptonewstoday for latest updates
ALSO READ : Is Ethereum Coin A Good Investment?
