Could the New ‘AI and Crypto Czar’ Expedite Innovation?
News that Donald Trump tapped David Sacks to serve as the "artificial intelligence (AI) and crypto czar” in his new administration triggered reactions across the media landscape.
“Donald Trump is going all in on Silicon Valley,” announced Politico. Reuters said the Sacks announcement was one more sign that Trump is intent on “overhauling U.S. policy.” The New York Times, meanwhile, said it “further cements the expectation that the Trump White House intends to take a lighter hand with the regulation of technology and in particular cryptocurrencies …”
A “lighter hand” is putting it mildly to those of us who remember the first Trump administration, which took a less-than-hospitable view of crypto. In 2020, Steve Mnuchin, Trump’s then-Treasury Secretary, likened cryptocurrencies to “old Swiss secret bank accounts,” labeling crypto a “national security issue” with ties to “billions of dollars of illicit activity such as cybercrime, tax evasion, illicit drugs and human trafficking.”
What a difference five years can make.
Not only is Sacks a well-known crypto proponent; he is also a former PayPal and startup executive and founder of Craft Ventures, a prominent VC firm. Given this resume and his new “AI and crypto czar” title, it’s a safe bet that the second Trump administration plans to be far more crypto-friendly than the first, pushing for less regulation and more innovation.
Indeed, in a social post, Trump himself said, that Sacks, serving in his new role, “will work on a legal framework so the Crypto industry has the clarity it has been asking for and can thrive in the U.S.”
Regulatory Clarity
What could Sacks' new position mean for alternative investments?
As PitchBook explained: “Sacks’ new role would grant him wide leverage to direct the executive branch’s approach to crypto and AI regulation — areas that could carry sweeping consequences for the startup world, including companies in Craft Ventures’ portfolio.” PitchBook reminded readers that Sacks will be serving only in a part-time capacity as a policy advisor because a “key-person clause in his [Craft Ventures] LP agreement prevents him from taking on a full-time position in the White House.”
But even as a side hustle, his track record at Craft Ventures suggests crypto and AI innovation could flourish in the near term. As leader of Craft Ventures, Sacks has invested in a wide range of crypto projects, including BitGo, a digital asset platform, SetLabs, an open-source DeFi protocol and Kresus, a crypto and NFT wallet project. He also supported Replit, an AI-driven web development tool, and Pearl, which deploys AI in dentistry.
As we recently discussed in an Avestix-sponsored webinar, advancements in AI, robotics, fintech, quantum computers, IoT and blockchain are unfolding at lightning speeds and often overlapping supporting one another in ways that are quickly transforming smart contracts, tokenization and DeFi. During the webinar, guest speaker venture capitalist Chris Kelly agreed that one of the biggest obstacles preventing technological innovation has been a lack of regulatory clarification.
By appointing David Sacks as its AI and crypto czar, the White House has taken a step that could strengthen ties between the Beltway and Silicon Valley — ties that have been strained in the past. Doing so could help expedite U.S. innovation going forward.
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