David Sacks and the blurred lines in the government service

David Sacks and the blurred lines in the government service

When Vultron announced his $ 22 million financing round earlier this week, the AI starting to highlight a key investor: Craft Ventures, the company “Founded by White House AI adviser David Sacks.”

The message has raised questions about conflicts of interest in Trump administration, where sacks act as both AI and Krypto -Czar while maintaining his role in craftsmanship -an event that critics see as a new model for government service where the lines between public duty and private gain have become unclear.

Sacks have not secured one but two ethical exceptions that allow him to shape the federal policy while maintaining financial efforts in the industries themselves. The first, an 11-page document from March, covers his crypto investments. The other, issued in June, specifically addresses his AI stocks. Together, they have activated which ethical experts call an unprecedented event.

“This is transplant,” said Kathleen Clark, a professor of Washington University Law, who specializes in government ethics after reviewing Sacks’ crypto exemption. “This is a lawyer in the White Huss law office that makes Trump’s bid and landlord [Sacks] Earn money while isolating him from criminal responsibility. “

Clark’s analysis is critical. She notes that the exception discusses percentage of sacks’ total assets – when signed, his share in Craft’s total portfolio represented less than 3.8% of his total assets, for example – but never reveals actual dollar amount. “The fact that this interest is only 3.8% of someone’s total assets, that’s something if you are talking about a lawyer professor. But 3.8% of this guy’s assets are a hell of a lot of money,” Clark said.

Clark also claims that the exception is not considering any consideration of potential upside. Federal rules require to investigate not only the current value but “potential profits.” For a venture capitalist like sacks, Clark notes, “Although right now [if his shares are] Less than 3.8% of his assets, if it is doing well, it could be more than that. ”

Craft Ventures did not respond to more requests from TechCrunch this week to discuss this story.

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The timing of Vultron’s message illustrates the complexity. Vultron creates AI tools specifically for federal contractors, which helps them win government contracts more effectively. The company boasts of reducing the timelines of the proposal “from weeks to days” and claims that a Fortune 500 client now saves “more than 20 hours per user each week” on federal contracting work.

A source close to the company says Craft Ventures ‘investment is sacked’ government appointment. However, the timing raises questions: The nation’s AI -Czar has a financial share in a company that deserves by helping companies win the very federal contracts that his policies will influence.

Senator Elizabeth Warren has been among the most vocal critics of these events. In a May letter to the Office of Government Ethics, the ranking member of the Senats Banking Committee questioned Sacks’ Crypto Waiver, noting that he was at the same time “with host of a $ 1.5 million dinner to the Crypto Industry” while forming federal cryptopolitics.

“Mr. Sacks also leads a company invested in crypto while governing the nation’s cryptopolitics,” Warren wrote. “Normally, federal law would prohibit such an explicit conflict of interest.”

Sacks have largely rejected Warren’s concerns and accused her of having a “pathological hatred of the crypto community.” He has said separately that he was selling a wealth in crypto before coming to the White House “because I would not even have the appearance of a conflict.”

In fact, supporters of sacks point to the victims he has made to government service. According to his exceptions, he and Craft Ventures have out of over $ 200 million in digital assets, with at least $ 85 million directly attributed to him. He has sold efforts in fast-growing companies, including his position in Elon Musk’s Xai, and initiated the sale of interests in about 90 venture capital funds, including Sequoia funds.

The source close to sacks emphasizes these divestments and notes that Craft Ventures, because of his government role, must now run each AI and crypto-related agreement past the White House Ethics Committee. This supervision of the supervision suggests makes it impossible to invest in feeding funds and smaller offers considering the amount of work that can result in all involved.

Clark claims that the underlying ethical framework remains defective. The sea positions herself, she claims, is designed to provide legal coverage rather than tackling ethical concerns. “This is money laundering,” she said. By complicating cases, SACKs as a government worker operates only 130 days a year – effectively every two weeks – while maintaining his commercial activities during off -periods. In September, for example, Sacks and his co-host in their popular podcast, all, will arrange what has become an annual three-day conference, which participants pay $ 7,500 per year. Person to participate in. While legally allowed, these activities further blur the lines between his public and private roles.

Some observers wonder if the sack-self-made billionaire from Forbes’ estimates-will declare victory and leave the government service completely. With the ingenious action now law, he can consider his primary mission implemented: to bring cryptocurrency from the fringes to the middle of the stage.

But it will probably take time. SACKS yesterday used a Fox News performance to detail his immediate priorities after the passage of the law, emphasized the development of regulatory frameworks in three key areas, including defining market structure categories (securities versus raw materials versus digital assets), expanding stableecoin rules and evaluating a potential national digital asset.

Meanwhile, critics are arguing about conflicts of interest in which the precedence is set. The rapid passage of crypto-friendly legislation combined with ongoing investments in AI companies serving the federal government suggests that sacks and others with similar events have placed themselves and their wider lane to take advantage of their government access.

Whether this represents a new normal for the Silicon Valley connections with Washington, or instead of a deviation that future administrations will return, to see. What is clear is that traditional ethical frameworks may be inadequate for an era where venture capitalists can maintain their investment activities while forming the policies that determine the future value of these investments.

Currently, the event continues, protected by carefully designed exceptions that ethical experts have questioned, but find legally inaccessible. As Clark puts it, “No one will be able to prosecute him.”

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