David Sacks and his venture capital firm offloaded over $200 million in crypto and crypto-related stocks before he commenced his role as the White House AI and crypto czar, a White House memorandum disclosed.

“You and Craft Ventures have divested over $200 million of positions related to the digital asset industry, of which $85 million is directly attributable to you,” said the memorandum dated March 5.

Crypto sell-off in an effort to prevent conflict of interest

The memorandum said the “significant steps” were taken to reduce potential conflicts of interest before Sacks began his tenure as the White House AI and crypto czar — in which a major part of his role is to help create a legal framework for the crypto industry.

Sacks offloaded all the “liquid cryptocurrency” in his portfolio, as well as Craft Ventures’ portfolio — the investment firm he co-founded in 2017 — including holdings in Bitcoin (BTC), Ether (ETH), and Solana (SOL) before US President Donald Trump’s inauguration on Jan. 20.

The memorandum outlined which cryptocurrencies and crypto-related stocks David Sacks sold prior to Trump’s inauguration. Source: The White House

Sacks also divested from publicly traded crypto-related firms, including Coinbase (COIN), Robinhood (HOOD), and stakes in private digital asset companies.

Additionally, he sold his limited partner interest in Solana-focused Multichain Capital and crypto-focused venture capital firm Blockchain Capital. At the same time, Craft Ventures offloaded its holdings in Multichain Capital and Bitwise Asset Management.

Sen. Warren urged Sacks to prove he no longer holds crypto

The memorandum is dated one day before Massachusetts Senator Elizabeth Warren urged Sacks in a March 6 letter to prove he no longer holds any digital assets, following Sacks’ claim in an X post that he sold off all his crypto.

“Despite your public statements via X, it remains unclear exactly when you personally divested from BTC, ETH, and SOL, when Craft Ventures divested from Bitwise, and whether people close to you ‘may have held positions and sold into the recent price surge,” Warren said.

Since Sacks commenced the role, he has been a strong vocal advocate on various issues in the crypto industry, from the importance of a Strategic Bitcoin Reserve to not over-taxing the crypto industry.

Related: Bitcoin panic selling costs new investors $100M in 6 weeks — Research

Sacks recently shut down the idea of crypto transaction taxes on an episode of the All In Podcast after host Jason Calacanis proposed charging a 0.01% tax on every cryptocurrency transaction.

“That’s always how taxes start. They are described as being very modest,” Sacks said.

“You know, when the income tax started, it only applied to like a thousand Americans, and the legislators swore up and down that it would never be applied to middle-class people,” Sacks added.

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Global investment manager VanEck has filed for an Avalanche (AVAX) exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC) seeking to offer investors direct exposure to the smart contract platform. 

A snippet of the S-1 filing was shared on social media on March 14 by Bloomberg analyst James Seyffart, who has been closely monitoring developments in the crypto ETF industry.

Source: James Seyffart

The proposed VanEck Avalanche ETF intends to “reflect the performance of the price of “AVAX,” the native token of the Avalanche network, less the expenses of the Trust’s operations,” the prospectus read.

The proposed fund will hold AVAX and will “value its Shares daily based on the reported MarketVector Avalanche Benchmark Rate,” the prospectus said.

As Seyffart noted in a follow-up post, the Trust’s registration “was shared widely […] earlier this week, But this is the first actual filing with the SEC.”

Avalanche is the 16th largest crypto asset, with a total market capitalization of $7.7 billion. The blockchain is notable for its high throughput and Ethereum Virtual Machine (EVM) compatibility.

Related: US Bitcoin ETFs break outflow streak with $13.3M inflow

ETF race heats up

The overwhelming success of the US spot Bitcoin (BTC) exchange-traded funds and the election of a pro-crypto administration in Washington have triggered an influx of crypto fund applications at the SEC.

As Cointelegraph recently reported, nine issuers have filed for an XRP (XRP) ETF, with Franklin Templeton joining the race on March 11. Issuers are also vying to list ETFs linked to Solana (SOL), Litecoin (LTC) and Dogecoin (DOGE).

Although the SEC has punted its decision on these offerings, opting to designate a longer period for review, Seyffart and fellow Bloomberg analyst Eric Balchinas say there are “relatively high odds of approval” later this year.

A January report by JPMorgan said the approval of altcoin ETFs will likely trigger billions of dollars in inflows, underscoring the pent-up demand for cryptocurrencies. In particular, SOL and XRP products could attract the most institutional interest.

Assuming modest adoption rates, SOL and XRP ETFs could attract billions in their first 12 months. Source: JPMorgan

“When applying these so-called “adoption rates” to SOL and XRP, we see SOL attracting roughly $3 billion-$6 billion of net assets and XRP gathering $4 billion-$8 billion in net new assets,” the report said.

Related: US Bitcoin ETF assets break $100 billion

The cryptocurrency trader whose ultra-leveraged Ether (ETH) trade tested Hyperliquid’s limits on March 12 has entered another multimillion-dollar position, this time in Chainlink (LINK), onchain data shows. 

On March 14, the anonymous whale, referred to on X as “ETH 50x Big Guy,” took out long positions in LINK worth approximately $31 million with 10 times leverage, according to Lookonchain, a Web3 analytics service. 

He placed the bets on Hyplerliquid and GMX, two popular perpetuals exchanges, Lookonchain said in a March 14 X post. Additionally, the whale accumulated roughly $12 million in spot LINK.

In the ensuing hours, the whale gradually reduced his LINK holdings through small swaps back into stablecoins, as per onchain data. 

Source: Lookonchain

Related: Hyperliquid ups margin requirements after $4 million liquidation loss

Massive trading gains

On March 12, the unidentified trader intentionally liquidated a roughly $200 million ETH long position, causing Hyperliquid’s liquidity pool, HLP, to lose $4 million. The trader’s profits topped roughly $1.8 million.

According to Lookonchain, the trader has earned nearly $17 million in the past month on Hyperliquid. 

The incident highlighted the challenges facing perpetual trading platforms such as Hyperliquid, which enable traders to take long or short positions many times larger than their deposited capital.

Hyperliquid said the trader’s actions did not qualify as an exploit and were instead a predictable consequence of the mechanics of its trading platform under extreme conditions. 

In response to the losses, Hyperliquid announced on March 13 revised collateral rules for traders with open positions to guard against similar edge cases in the future. 

Launched in 2024, Hyperliquid’s flagship perpetuals exchange has captured 70% of the market share, surpassing rivals such as GMX and dYdX, according to a January report by asset manager VanEck. 

Chainlink, the most popular decentralized oracle service, saw the price of its native LINK token increase by more than 150% in the weeks after President Donald Trump prevailed in the US election. 

It has since given up much of those gains, declining from highs of nearly $30 per token in December to less than $14 as of March 14, according to data from CoinGecko. 

Chainlink’s market capitalization is currently around $8.7 billion. 

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