Is the appointment of David Sacks a great win for the crypto industry?

Author: Veronica Irwin Source: unchainedcrypto Translation: Shan Ouba, Golden Finance

The only word I can think of for the crypto policy community’s reaction to David Sacks’s appointment as the White House Director of AI and Crypto Affairs for President-elect Donald Trump is “confused”.

Last night, several sources I contacted requested some time to collect their thoughts. Earlier on Thursday, one source even questioned whether there would really be such a role as a “head of crypto affairs.” And as of this morning, sources who have communicated privately with Unchained have had mixed reactions. Granted, Trump’s appointment of a head of crypto and AI affairs is a bigger step than the current administration has taken in supporting the industry. But it is a far cry from the dedicated “crypto advisory committee” that the industry had expected, which is really surprising.

However, the public reaction has begun to trend toward flattery.

David Sacks as Head of AI and Crypto? Why the Industry Was Surprised

Industry insiders who spoke to Unchained had expected a White House position or advisory committee dedicated to crypto.

Donald Trump surprised the industry Thursday night by announcing on Truth Social that investor and podcast host David Sacks would be the White House Head of AI and Crypto. Previously, the industry was expecting a position dedicated to crypto. However, according to the announcement, Sacks will lead a presidential science and technology advisory committee, suggesting that Trump has adjusted plans to expand the crypto-focused advisory committee promised at the Bitcoin 2024 conference this summer to include other areas of the technology industry.

"David will develop government policy in the areas of artificial intelligence and cryptocurrency, two areas that are critical to the future of American competitiveness," Truth Social's statement read. "He will defend free speech on the Internet and guide us away from the bias and censorship of large technology companies. He will develop a legal framework that provides the crypto industry with the clarity it has long requested so that it can thrive in the United States."

Sources active in crypto policy circles told Unchained that they were surprised by this, and many people had even thought that Trump had not yet decided whether to establish a crypto chief. However, many people on social media took the news positively, believing that combining encryption with artificial intelligence was a major boost for the crypto industry by Trump.

Messari founder Ryan Selkis said on X (original Twitter): "Combining crypto with artificial intelligence, led by a top figure in the technology world, has elevated crypto to an incredible height." Blockchain Association CEO Kristin Smith said in a statement: "David Sacks' unparalleled record of success as an entrepreneur, investor, and innovator makes him the best person to lead U.S. crypto policy at this critical moment in the development of the industry."

From PayPal Mafia to Crypto Supporter

David Sacks is the co-founder of early-stage venture capital firm Craft Ventures and was an early employee of Confinity (later PayPal). With his forward-looking work in the field of financial technology, Sacks has become an important voice in Silicon Valley. He has close ties with other members of the PayPal founding team, such as serial entrepreneur Elon Musk and venture capitalist Peter Thiel. Over the years, Sacks has had a profound impact on political thinking in the tech industry, while also gaining a foothold in wider right-wing political circles.

Sacks has further expanded his public profile by co-hosting the "All-In" podcast, where he discusses a variety of tech, social and political topics with fellow Silicon Valley entrepreneurs and investors Chamath Palihapitiya, Jason Calacanis and David Friedberg. According to Chartable, "All-In" is the 226th-ranked podcast overall on Apple Podcasts and the third-most popular tech podcast, demonstrating his broad influence in the tech industry. During the campaign, Trump recruited many tech investors and entrepreneurs around him.

On the podcast, Sacks often defends the views of Donald Trump and the Republican Party, and supports cryptocurrency in general. For example, Sacks has called the mixed court ruling on XRP — that XRP is not considered a security when sold on public exchanges, but is considered a security when sold to institutional investors — a win for the entire crypto industry.

Sacks, known as a "Solana bull," invested in early Solana investor Multicoin Capital as early as 2018 and said on the "All-In" podcast in 2023 that he did not sell SOL after the FTX debacle. His company Craft Ventures has also invested in crypto companies BitGo and Bitwise. However, Sacks is not widely considered a crypto-focused investor or entrepreneur, and is not actively involved in crypto policy circles or crypto conference events.

Mixed reactions from the crypto industry

As of Thursday morning, crypto policy sources who spoke to Unchained believed an announcement of a crypto chief or advisory board was still weeks away and were skeptical about whether the roles would exist and whether they would be official White House positions or merely symbolic.

In the past few weeks, they had considered candidates as possible candidates for some of the big crypto donors who have met with Trump at crypto and tech roundtables over the past few months. Potential crypto chiefs or advisory board members mentioned include Gemini co-founders Cameron and Tyler Winklevoss, Coinbase CEO Brian Armstrong, or executives from bitcoin mining companies such as Riot Platforms.

The general understanding was that both the chief and advisory board would be focused on the crypto sector. Therefore, Trump's combination of crypto with other technology topics such as artificial intelligence in the announcement came as a surprise.

Fox Business has reported that former Commodity Futures Trading Commission (CFTC) Chairman Chris Giancarlo, nicknamed "The God of Crypto" by the industry, was one of the finalists for the crypto chief position. However, some sources who spoke to Unchained expressed doubts that Giancarlo was a real contender and believed that the widespread rumors may just be the product of his own efforts to win the position.

In addition, two sources mentioned to Unchained after the election that Ron Hammond, director of government relations for the Blockchain Association, was also a potential candidate, but he has not been considered a serious candidate since then. It is unclear whether the Trump-Vance transition team formally explored other candidates besides Sacks.

But can Sacks focus on crypto?

Unchained first reported that the White House was considering creating a position dedicated to crypto affairs, but a rule from the Office of Government Ethics (OGE) complicated the process. The rule is essentially a "legal advisory" ruling that, while not itself a law passed by Congress, has the force of law on official staff.

Sacks' appointment raises questions about whether the position might be a non-government advisory role (thus exempting it from the rule), whether the Trump administration plans to modify or circumvent the rule in some way, or whether a new OGE director will be appointed to change the rule. A spokesperson for Craft Ventures told Axios that the role is "advisory in nature," similar to how the Office of Government Ethics operates, and therefore would not require Sacks to leave Craft Ventures.

Chamber of Digital Commerce leadership previously sent a letter to OGE Acting Director Shelley Finlayson requesting reconsideration of the rule, but did not immediately respond to a request for comment, telling Unchained that it had not received a response as of Nov. 21.

Spokespeople for the Trump-Vance transition team and Craft Ventures did not immediately respond to requests for comment. Chris Giancarlo also did not respond to a request for comment.