Justice Department Ends Probe of Fed Chair Powell, Clearing Path for Warsh Confirmation

The Department of Justice has officially ended its criminal investigation into Federal Reserve Chair Jerome Powell, removing the last major obstacle to Kevin Warsh's confirmation as the next head of the central bank. Senator Thom Tillis, who had been holding up the nomination, declared victory, telling reporters "Tillis won" in response to the decision.

Warsh, 56, served as a Fed governor from 2006 to 2011 and has been a sharp critic of the central bank's pandemic-era policies, calling them "the biggest policy error in 40 or 50 years." But it's his financial disclosures that have drawn the most scrutiny. Warsh has reported holdings in dozens of cryptocurrency ventures, including Solana, Polymarket, dYdX, Dapper Labs, and Optimism. During his confirmation hearing, he told senators that "digital assets are already part of the fabric of our financial services industry," while firmly opposing any Federal Reserve-issued central bank digital currency.

Senator Elizabeth Warren has been among the most vocal opponents, calling Warsh a "sock puppet" for Trump and warning that his appointment could open the door to using the Fed's authority "to enrich himself, his family, and his Wall Street buddies."

Prediction markets reacted swiftly. On Kalshi, Warsh's odds of confirmation before Powell's May 15 departure surged to 84%, up from roughly 30% before the DOJ announcement. Polymarket pegged the odds at 77%.

What This Means For You: Warsh's crypto-friendly stance could signal a more permissive regulatory environment for digital assets if confirmed. If you hold crypto or crypto-adjacent stocks, this is a tailwind. But his opposition to a CBDC and his criticism of pandemic-era monetary policy suggest a more hawkish tilt — which could mean tighter financial conditions ahead.