Key Takeaways
David Sacks strongly denied allegations of financial misconduct, labeling them as slander and defamation. Prior to his consulting role, Sacks sold over $200 million worth of cryptocurrency holdings. Sacks defended himself against recent claims that he manipulated the cryptocurrency market for personal gain, stating that the allegations are unfounded.
Speaking on The All-In Podcast, Sacks, who serves as the White House AI and cryptocurrency czar, addressed accusations that he participated in a scheme to inflate his cryptocurrency holdings to benefit himself.
“People immediately started accusing me of being involved in a scheme to pump up my holdings or create exit liquidity for myself,” Sacks said, emphasizing the seriousness of these claims as they imply criminal activity.
Sacks reiterated that he had divested all of his cryptocurrency holdings before joining the administration to eliminate any potential conflict of interest. In an earlier statement, he confirmed that he had sold Bitcoin, Ethereum, and Solana.
“Fluctuations in the cryptocurrency market are inevitable,” he explained. “You don’t want anyone to be able to point to one of those fluctuations and claim that the cryptocurrencies benefited from it, creating a conspiracy theory, which is essentially what happened.”
Sacks revealed that he and his venture firm Kraft had sold approximately $200 million in cryptocurrency assets, with $85 million personally attributed to him.
“We took care of that before day one, paid taxes on it, and made it clear that there would be no conflict,” he stated. However, the scrutiny then shifted, with people suggesting that even if he didn’t own cryptocurrency directly, he still had investments in cryptocurrency funds.
Sacks clarified that in addition to divesting from direct cryptocurrency holdings, he also withdrew from various cryptocurrency-focused investment funds, including Bitwise, Multicoin Capital, and Blockchain Capital.
“At this point, I think they’ve given up on this narrative,” Sacks remarked.
According to Calacanis, who manages one of the divested funds, the selling process involves offering fund interests at discounts of “50%, 25% off,” potentially resulting in significant financial losses for Sacks.
The crypto czar also dismissed the idea that he sought financial gain through his role, disclosing that he is serving as an unpaid consultant in the administration.
Sacks criticized the assumption that wealthy individuals enter government positions for financial gain, calling it “lazy and foolish.”
“It’s lazy and foolish to believe that someone who is already successful in business would enter government to make more money. I was making money before,” he stated. “This decision significantly disrupts my business interests.”
Sacks reiterated that his divestments were necessary to avoid any ethical concerns, even if they resulted in substantial financial losses.
“I have to either pay taxes or accept a significant discount by divesting. It costs money,” he explained. “So it’s simply a lazy narrative that people create, but there is no truth to it.”
Sacks has faced public scrutiny over allegations of potential conflicts of interest related to his role as the crypto and AI czar for the Trump administration.
Critics, including Senator Elizabeth Warren, have expressed concerns that Sacks could influence Trump’s selection of alternative cryptocurrencies for the US crypto reserve and financially benefit from those choices, which include Bitcoin, Ethereum, Solana, Cardano, and XRP.
The President ultimately signed an executive order to establish a Strategic Bitcoin Reserve and a stockpile of US digital assets using legal forfeiture.
In an interview with Bloomberg TV on Friday, Sacks clarified that Trump mentioned XRP, SOL, and ADA because they were among the top five cryptocurrencies in terms of market capitalization.