White House AI and Crypto Czar Slammed! Controversy Erupts Over 708 Undivested Investments for Personal Gain

The New York Times recently published an investigation accusing White House AI and crypto czar David Sacks of promoting policies that may have benefited his technology and crypto investments during his time as a special government employee. Although he previously claimed to have sold over $200 million in holdings, about $85 million of which were personal assets, the Times pointed out that his financial disclosures still listed 708 tech investments, 449 of which are related to AI.

NYT Accuses Sacks of Not Fully Divesting 708 Investments

(Source: The New York Times)

According to the Times, as Craft Ventures co-founder, Sacks previously held a large number of AI and crypto assets, including at least 20 crypto-related investments. While such investment scale is not uncommon in Silicon Valley VC circles, it raises conflict of interest concerns when investors also hold senior government roles. The core argument by the Times is that Sacks may have benefited his own portfolio while driving AI and crypto policy.

Despite his claims of selling over $200 million in holdings, including $85 million in personal assets, the Times noted that his disclosures still retained 708 tech investments, 449 of which are AI-related. This is a staggering figure, indicating Sacks’ portfolio is highly concentrated in the areas where he shapes policy. As a result, there are doubts that he may have maintained undivested financial interests while participating in policy-making.

The Times investigation also questioned the transparency of Sacks’ actual attendance and whether he operated at the edge of regulatory boundaries. As a short-term special government employee, Sacks is not allowed more than 130 days per year, but the report questions whether his actual days and depth of policy involvement exceeded that limit. This points to a deeper issue: whether special government employee status is being used to bypass stricter conflict-of-interest rules.

Key Points of NYT’s Accusations

Investment Scale: Retained 708 tech investments, 449 related to AI

Incomplete Divestment: Sold $200 million in holdings but still kept a large number of related assets

Policy Favoritism: Promoted AI and crypto policies that could benefit his investments

Lack of Transparency: Actual attendance and level of policy involvement not fully disclosed

The report also points out Sacks’ close ties with numerous AI companies, arguing that he should provide more transparent disclosures, especially given his key role in chip export policy, cross-border AI chip transactions, and Silicon Valley tech strategy. This overlap of multiple roles greatly increases the risk of conflicts of interest, as any policy decision could impact several related industries at once.

From a journalistic ethics perspective, the Times’ report is based on public financial disclosure documents and interviews, without using anonymous leaks or unverified sources. However, the rigor of its reasoning from facts to conclusions has become a point of controversy. The Times believes that simply having 708 investments constitutes a potential conflict of interest, while Sacks argues that as long as he followed ethics review procedures and sold required assets, there was no real violation.

Sacks Strongly Rebuts, Hires Lawyers to Accuse Media of Fabrication

Sacks immediately hit back on X, stating that the Times “strung together a bunch of stories that don’t amount to evidence,” and called the report “content-free hype.” He countered that the Times has made multiple different accusations over the past five months, switching arguments each time one is refuted. He emphasized that the article relies on “scattered examples” to infer quid pro quo, which cannot support the claims made in the headline.

This response strategy shows Sacks’ strong dissatisfaction with the media investigation. He believes the Times is using a “hit-and-run” tactic, changing the angle of attack whenever an accusation is refuted. Sacks sees this continued coverage as biased targeting, not objective reporting.

Sacks’ spokesperson responded that he has followed government ethics rules, sold required assets, and obtained two ethics clearance letters before joining the White House, covering AI and crypto. The spokesperson stressed that the Times cited many incomplete facts and even misled readers by conflating divested investments with current responsibilities. The core argument here is procedural compliance—as long as required ethics reviews are followed, there should be no conflict of interest accusations.

Sacks retained the prominent US defamation law firm Clare Locke to send a formal letter accusing the Times of writing its report “with a predetermined conclusion” and “deliberately ignoring” his ethics review documents and official responses. The letter states the Times falsely implied Sacks lacked AI-related ethics clearance and accused him of using his position to influence policy for profit, when relevant investments had already been sold within the regulated timeframe.

The legal team further criticized that several incidents cited in the report “did not occur at all” and demanded the media “reconsider its reporting.” Notably, the letter did not request a retraction, but unusually used the term “abandon the article,” sparking discussion. However, legal experts noted that such requests have little practical meaning in the news industry and do not meet formal defamation standards. Clare Locke is one of the most prominent US defamation law firms, specializing in high-profile client-media disputes, and its involvement shows Sacks’ seriousness about the matter.

GENIUS Act and BitGo Investment Become Focal Points of Controversy

Among the conflict cases named by the Times, stablecoin regulation framework the “GENIUS Act” is the most controversial. Craft Ventures holds a 7.8% stake in BitGo, which is planning to go public and offers “stablecoin-as-a-service.” The report questions that as the AI and crypto czar actively supported the GENIUS Act and promoted US stablecoin regulation, BitGo’s business prospects could benefit.

The logic of this accusation is: Sacks holds BitGo shares → promotes the GENIUS Act to establish a stablecoin regulatory framework → BitGo, as a stablecoin service provider, benefits from regulatory clarity → Sacks’ investment appreciates. On the surface, this logic seems valid. However, Sacks’ defense is that the GENIUS Act is bipartisan legislation that he alone cannot decide, and the act creates a framework for the entire stablecoin industry, so all compliant issuers would benefit, not just BitGo.

The more complex question is whether Sacks has already sold his BitGo shares. According to his spokesperson, required assets have been sold, but the Times questions the timing and completeness of such sales. If Sacks still held BitGo shares after joining the White House, the conflict-of-interest accusation would be stronger; if he sold them within the ethics clearance timeframe, the basis for the accusation would be weakened.

Additionally, the report says Sacks has close ties to several AI companies and argues for more transparent disclosures, especially given his key roles in chip export policy, cross-border AI chip deals, and Silicon Valley tech strategy. Chip export policy has a major impact on the AI industry; if Sacks still held AI company shares while shaping these policies, this would be a clear conflict of interest.

Industry Divides and Power Struggles Amid Policy Reshaping

After the controversy broke out, reactions within the tech and crypto sectors were mixed. Tether CEO Paolo Ardoino and several industry figures publicly supported Sacks, dismissing the report as “not credible” and ignoring his recent policy contributions. Ardoino, one of the most influential figures in crypto, represents internal industry support for Sacks. Supporters believe Sacks has played a key role in making the US a “crypto-friendly” country and shouldn’t be accused of profiteering just for holding related investments.

Some observers believe that Sacks, by promoting stablecoin legislation, relaxing bank crypto restrictions, and shaping the US AI competition strategy, has been on the “innovation promotion” side, naturally making him a target for some political forces. This interpretation politicizes the controversy, seeing the Times’ report as a Democratic counterattack on Trump administration tech policy.

However, critics focus on another aspect: Sacks’ dual roles as a Silicon Valley investor and government advisor form a rare high-risk structure. Although he is a short-term special government employee with a 130-day annual cap, his actual attendance is not fully transparent. Calls for transparency and disclosure of potential interests are growing, while Sacks insists all decisions are ethics-reviewed and accuses the Times of letting narrative override facts.

This controversy comes as the US is undergoing key shifts in AI regulation and cryptocurrency policy. As the White House AI and crypto czar, Sacks’ role is sensitive and carries major responsibilities; any policy move could impact the industry and markets. The public standoff between the Times and Sacks is seen as a structural tug-of-war between “transparency and efficiency,” “regulation and innovation” in new US tech policy. The outcome remains unclear, but the debate will continue to affect trust in the US tech policy-making process and marks a key battle in the new tech power structure in Washington.