President Trump’s announcement on Sunday that he plans to establish a federal cryptocurrency reserve sent digital asset markets soaring. However, it also reignited concerns over potential conflicts of interest, this time involving David Sacks, the venture capitalist who serves as Trump’s crypto and artificial intelligence czar.

The president said on Sunday that a future U.S. crypto reserve will hold tokens including XRP, SOL, ADA, ETH and BTC. ADA soared by 60% within minutes of the announcement, and all of the other listed tokens experienced double-digit price bumps.

The market response immediately drew attention to the range of ways in which Trump and his inner circle could stand to benefit from his crypto policies.

Among the most obvious potential beneficiaries was Sacks, whose venture firm, Craft Ventures, is invested in Bitwise—a crypto index fund manager with holdings in all the digital tokens named in Trump's statement—and other crypto startups. In the past, Sacks also disclosed personal investments in some of the tokens listed by the president.

Following Sunday's announcement, Sacks stated on X, “I sold all my cryptocurrency (including BTC, ETH, and SOL) prior to the start of the administration." In response to a community note on X about Craft Ventures' investment in Bitwise, Sacks added, "I had a $74k position in the Bitwise ETF, which I sold on January 22. I do not have 'large indirect holdings.'"

It is unclear if Sacks retains a direct stake in Bitwise through Craft Ventures, where he remains a partner. Sacks led Craft Ventures' 2017 seed investment into Bitwise, and the venture firm still lists Bitwise in its portfolio.

A representative for Craft Ventures declined to share anything beyond Sacks' X posts. The firm told the Financial Times on Sunday that it still has stakes in some cryptocurrency companies.

Bitwise operates a series of exchange-traded funds (ETFs), including a "10 Crypto Index Fund," which contains all of the tokens slated for Trump's reserve. The firm has also submitted applications to operate ETFs for XRP and SOL, among other tokens. If these applications are approved, Bitwise would benefit from heightened interest in the assets if they're included in a U.S. crypto reserve.

Bitwise did not respond to a request for comment.

Sacks will host a first-of-its-kind White House cryptocurrency summit on Friday, during which more details about the administration's plans for the industry are expected to emerge.

Trump has worked hard over the past year to court supporters in the cryptocurrency industry — one of the largest corporate donor groups to the 2024 election. While the president's anti-regulatory posture has been welcomed by some in the industry, even some of his pro-crypto supporters have begun to fear that highlighting particularly volatile assets like cardano (ADA) and XRP (XRP) risks delegitimizing the sector.

The president's own cryptocurrency businesses have added to concerns around potential conflicts of interest.

In January, Trump launched a meme coin, TRUMP, on the Solana blockchain — the network behind the SOL token. Meanwhile, World Liberty Financial (WLFI) — a decentralized finance venture backed by the president and his sons — has built its own treasury of crypto assets. The treasury includes some of the same tokens listed for inclusion in the federal crypto reserve, meaning any boost in price could ostensibly benefit Trump directly.

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