When AI startup Vultron announced its $22 million funding round this week, it prominently featured one investor: Craft Ventures, co-founded by current White House AI adviser David Sacks. While the press release celebrated the partnership, it also reignited a broader debate: can government officials truly serve the public interest while retaining deep ties to the private sector?
Sacks, a Silicon Valley heavyweight and former PayPal executive, now holds dual roles as a government AI and crypto policy adviser and as a key figure at Craft Ventures. His position raises serious questions about ethics and influence at the highest levels of power—especially in a post-Trump Washington where traditional guardrails around conflicts of interest are being tested like never before.
Dual Roles and Ethics Waivers Raise Red Flags
Since entering public service, Sacks has received two ethics waivers—legal documents that allow him to continue participating in industries where he has significant financial interests. The first waiver, issued in March, covers his crypto holdings. A second, more recent waiver in June, pertains specifically to his investments in artificial intelligence.
Together, these waivers enable what ethics experts describe as an unprecedented arrangement: a powerful government official actively shaping national policy in sectors where he still holds substantial financial stakes. Critics argue that this dual role fundamentally undermines public trust.
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“This is graft,” said Kathleen Clark, a professor at Washington University who specializes in government ethics. After reviewing the crypto waiver, she said it appears more designed to shield Sacks from legal consequences than to protect the public interest. “This is a lawyer in the White House Counsel’s office doing Trump’s bidding, letting [Sacks] make money while insulating him from criminal liability.”
One key criticism is the vagueness of the waivers. They refer to Sacks’ holdings as percentages of his overall assets but don’t disclose actual dollar amounts. According to the waiver, his stake in Craft Ventures represented less than 3.8% of his total wealth at the time. However, as Clark pointed out, that small percentage could still represent millions, especially for someone of Sacks’ net worth.
“The fact that this interest is just 3.8% of someone’s total assets—that’s something if you’re talking about a law professor. But 3.8% of this guy’s assets is a heck of a lot of money,” she said.
Moreover, the waivers fail to account for potential future gains. Federal regulations require evaluating not just current value but the potential for profit or loss. With high-growth sectors like crypto and AI, future upside can be enormous—particularly for someone in a policymaking role.
Vultron Funding Highlights Conflict of Interest Risks
The timing of Vultron’s announcement underscores the murkiness of Sacks’ dual role. The startup develops AI tools specifically for federal contractors, helping companies win government work more efficiently. It boasts impressive stats, claiming to reduce proposal timelines by weeks and saving thousands of hours for Fortune 500 clients engaged in government contracting.
A source familiar with the deal insists Craft Ventures invested in Vultron before Sacks accepted his government position. Still, the optics are troubling: a senior White House adviser retains financial ties to a company whose success depends directly on government contracting policies—policies that he now influences.
Political Scrutiny Mounts
Lawmakers have started paying close attention. In May, Senator Elizabeth Warren sent a letter to the Office of Government Ethics, criticizing Sacks’ crypto waiver. As the Senate Banking Committee’s ranking member, Warren expressed concern that Sacks was simultaneously “co-hosting a $1.5 million-a-head dinner for crypto industry players” while overseeing the administration’s crypto policy.
“Mr. Sacks leads a firm invested in crypto while guiding the nation’s crypto regulations,” Warren wrote. “Normally, federal law would prohibit such an explicit conflict of interest.”
Sacks has dismissed these concerns, often publicly. He’s accused Warren of having a “pathological hatred for the crypto community” and claimed he sold a large portion of his crypto holdings prior to joining the administration “to avoid even the appearance of a conflict.”
The Case for Sacrifice and Continued Influence
Supporters argue that Sacks has made considerable sacrifices to serve in government. According to his waivers, he and Craft Ventures have divested more than $200 million in digital assets, including at least $85 million directly attributable to him. He’s exited major positions—including a stake in Elon Musk’s xAI—and is in the process of unwinding investments in nearly 90 venture capital funds, including Sequoia Capital.
A source close to Sacks emphasized the new oversight imposed on his firm. Any AI or crypto-related investment Craft Ventures considers must now be reviewed by the White House ethics team. That process, they say, effectively blocks participation in smaller or faster-moving deals.
Even so, critics argue that legal clearance is not the same as ethical clarity.
“These waivers are meant to legalize what remains ethically questionable,” Clark said. “It’s legal cover—not ethical guidance.”
Government Service “Part-Time,” Business Interests Full-Time
Adding to the controversy is Sacks’ part-time status. He serves roughly 130 days per year—about half the work calendar—leaving room for his ongoing private sector involvement. For example, this September, Sacks and his fellow co-hosts from the “All In” podcast will host a lavish, three-day summit. Tickets cost $7,500 per attendee. Though not technically illegal, the event underscores how Sacks continues to blend public service with personal brand-building and private revenue generation.
The structure of his role challenges conventional ideas of what public service entails. Historically, government officials have been expected to recuse themselves from private sector roles or place their holdings in blind trusts. Sacks’ situation reflects a new, more permissive model one that’s raising alarms among watchdogs and ethicists alike.
Crypto Legislation and the New Era of Policy Influence
With the passage of the GENIUS Act—a landmark crypto bill that many see as a win for the industry some speculate that Sacks may soon exit public service, having achieved his core objectives. The bill’s rapid journey from proposal to law demonstrates the accelerating pace of crypto integration into mainstream financial regulation.
In a recent Fox News appearance, Sacks outlined his next steps: developing regulatory frameworks for defining digital asset classes, refining stablecoin regulations, and exploring a national crypto asset reserve. Each of these initiatives could profoundly influence markets and benefit companies aligned with his venture portfolio.
A Question of Precedent
The concern now is whether this model becomes standard. By retaining investment ties while guiding policy, Sacks and others in similar roles could fundamentally reshape how government interacts with private enterprise.
If left unchecked, this blending of public power and private investment risks undermining faith in governance. “Whether this becomes the new normal or a cautionary tale depends on how future administrations respond,” said a senior Capitol Hill aide.
For now, the status quo persists protected by legal waivers and buoyed by high-profile supporters. As Professor Clark summarized: “No one will be able to prosecute him. But that doesn’t mean it’s right.”
Frequently Asked Questions
Who is David Sacks?
David Sacks is a tech entrepreneur, venture capitalist, and co-founder of Craft Ventures. He was previously COO of PayPal and has invested in companies like Airbnb, Slack, and Facebook. He currently serves as an AI and crypto policy adviser to the U.S. government while maintaining private business interests.
Why is David Sacks’ government role controversial?
Sacks’ government advisory role is controversial because he holds financial stakes in sectors he helps regulate—namely AI and cryptocurrency. Critics argue this creates a conflict of interest and blurs ethical lines between public service and private profit.
What are ethics waivers, and how do they apply to David Sacks?
Ethics waivers are legal exemptions allowing government officials to participate in decisions that may affect their financial interests. Sacks has received two waivers—one for crypto and another for AI—allowing him to remain involved in policy discussions while holding related investments.
Has David Sacks divested any of his business holdings?
Yes. According to public documents, Sacks has divested over $200 million in crypto-related assets and exited certain AI-related investments, including Elon Musk’s xAI. However, he still retains other holdings and a role at Craft Ventures.
What is Craft Ventures’ role in the controversy?
Craft Ventures, co-founded by Sacks, continues to invest in emerging tech sectors like AI and crypto. Its investment in Vultron—a startup focused on federal contracting—raised concerns about potential overlap between Sacks’ government duties and private gain.
Is David Sacks breaking any laws?
There’s no evidence Sacks has broken any laws. His activities are permitted under federal rules, especially due to ethics waivers. However, legal compliance doesn’t always equal ethical transparency, which is the core of the public concern.
How does David Sacks defend his dual role?
Sacks claims he has taken steps to avoid conflicts of interest, including selling assets and submitting to White House ethics reviews. He also argues that experienced tech leaders are essential for modern policymaking.
What impact could this have on U.S. tech policy?
Sacks’ influence may shape national policies on cryptocurrency regulation, AI frameworks, and digital innovation. While some see his involvement as beneficial due to industry expertise, others warn it could set a dangerous pre
Conclusion
David Sacks embodies a growing trend where tech leaders step into government roles while maintaining ties to the industries they help shape. His dual position—policy influencer and private investor—raises legitimate concerns about ethics, transparency, and the future of public trust.