David Sacks Rejects NYT Conflict of Interest Allegations as 'Nothing Burger'

Article Highlights

• David Sacks denies conflict of interest allegations in a New York Times report.
• Sacks labels the report a 'nothing burger' and 'bogus narrative'.
• The report focuses on Sacks' investments in AI and crypto and their relation to his government role.
• The report highlights Craft Ventures' investment in BitGo and its connection to the GENIUS Act, which supports stablecoins.
• Sacks responds with a letter from his lawyers accusing the NYT of 'willfully mischaracterizing' facts.

David Sacks, a prominent figure in the White House advising on AI and cryptocurrency matters, has fiercely countered a New York Times report detailing how his government advisory position could potentially benefit his investments and close associates.

In a post on X, Sacks stated that despite having “debunked in detail” the Times’ reporting over the past five months, the outlet proceeded to publish the article on Sunday regarding his alleged conflicts of interest. “Today they evidently just threw up their hands and published this nothing burger,” Sacks wrote. “Anyone who reads the story carefully can see that they strung together a bunch of anecdotes that don’t support the headline.”

Sacks is a co-founder and partner at the venture capital firm Craft Ventures. His role as a special government employee at the White House has previously faced scrutiny. Senator Elizabeth Warren raised concerns in May, stating that Sacks is “financially invested in the crypto industry, positioning him to potentially profit from the crypto policy changes he makes at the White House.”

Prior to becoming the crypto advisor, Sacks and Craft divested over $200 million in crypto assets and related stocks. At least $85 million of this sum belonged to Sacks. However, he retained interests in several illiquid investments in “private equity of digital asset-related companies.”

NYT Claims Sacks Retains 20 Crypto Investments

The Times reported that their analysis of Sacks’ financial disclosures revealed that he maintained 708 tech investments, 449 of which are AI-related and 20 are connected to the crypto space. These investments could potentially benefit from policies Sacks advocates for.

As an example of a perceived conflict in Sacks’ role, the outlet pointed out that Craft Ventures is invested in the crypto infrastructure company BitGo, which provides a stablecoin-as-a-service offering.

BitGo filed to go public in September, with regulatory filings indicating that Craft owned 7.8% of the company. The Times highlighted that Sacks was a significant supporter of the stablecoin-regulating GENIUS Act, which was enacted earlier this year. Many crypto commentators believe this law will boost the use and acceptance of stablecoins by institutions.

The Times also cited other examples involving Sacks’ and Craft’s ties to companies involved in AI. The value of these companies has surged as the White House and Wall Street invest heavily in the potential of AI technology.

The Times noted that Sacks’ ethics waivers, which were released in March, stated that he would divest his interests in AI and crypto. However, the waivers do not specify when he sold the assets or detail the value of his remaining investments.

Sacks: NYT Created 'Bogus Narrative'

In his post on X, Sacks shared a letter to the Times from his lawyers at Clare Locke, accusing the outlet of setting out “to write a hit piece” and giving their reporters “clear marching orders” to find conflicts of interest.

Sacks further stated that it was “very clear how NYT willfully mischaracterized or ignored the facts to support their bogus narrative.”

Sacks’ spokesperson, Jessica Hoffman, told the Times that he has adhered to the rules for special government employees. The Office of Government Ethics stated that Sacks should sell his investments in certain types of companies but not others.

Sacks’ role as a special government employee is limited to 130 days. In September, Democratic lawmakers questioned whether he had exceeded the allowed number of days for his appointment. However, reports indicate that Sacks carefully manages his time as a special government employee to remain within the limit.