Newly released documents have unveiled Jeffrey Epstein's deep ties to the cryptocurrency industry, shedding light on his early backing of bitcoin and major crypto companies like Coinbase.
Millions of files from the US Department of Justice reveal that Epstein bankrolled the "principal home and funding source" for bitcoin during its nascent stages. In 2014, he invested $3 million in Coinbase, the largest cryptocurrency exchange in the US, and also cut a check to Blockstream, a prominent bitcoin-focused technology firm. These investments came six years after his 2008 conviction for soliciting prostitution from a minor.
Despite online murmurings about a sector-level reckoning, most industry players predict few consequences for crypto companies. Some view Epstein as a "skeptical investor" who exited prematurely, while others claim he aimed to "undermine bitcoin."
Coinbase's Questionable Cash
The crypto companies that secured Epstein's investment have grown into multibillion-dollar giants. Coinbase went public on the Nasdaq in 2021, with co-founder Brian Armstrong heavily influencing crypto regulation in the United States.
Epstein's 2014 investment in Coinbase was brokered by Brock Pierce, a crypto evangelist and co-founder of Tether. Documents show that Fred Ehrsam, a Coinbase co-founder, liaised with Pierce about the investment and sought to meet Epstein. Additional filings suggest Epstein sold half of his shares to Pierce's firm, Blockchain Capital, for $15 million in 2018.
A spokeswoman for Coinbase declined to comment; Pierce did not respond to requests.
Backing Bitcoin
Epstein's financing of bitcoin's development stemmed from his role as a donor to MIT. Over 20 years, MIT accepted more than $800,000 from Epstein, who facilitated over $7 million in donations from other wealthy individuals.
In 2015 communications, Joichi Ito, then director of MIT's Media Lab, wrote that Epstein's "gift funds" were used to "underwrite" the launch of the Digital Currency Initiative, tasked with researching open-source crypto technologies. Ito explained the Lab served as the "principal home and funding source" for bitcoin.
In 2014, Ito brokered Epstein's $500,000 early-stage investment in Blockstream through a fund they co-owned. Email communications reveal Blockstream's co-founders, Adam Back and Austin Hill, were invited by Epstein to meet near his private island.
On Twitter, Back claimed Blockstream understood Epstein to be a "limited partner" in Ito's fund, which later divested due to "potential conflict of interest." He stated Blockstream has no direct or indirect financial connection with Epstein.
In communications, Epstein noted he "like[d]" Back. Hill continued emailing Epstein into 2017, checking in after a storm.
Epstein Emails Elicit Muted Backlash from Crypto Industry
Luke Dashjr, an early bitcoin contributor, has called for Adam Back to resign as Blockstream's CEO over ties to Epstein. Dashjr said Epstein's interest in bitcoin was a sign that "evil men often seek to destroy what is good."
Charlotte Fang, founder of Remilia, said "only unserious people might care" about Epstein's investments, noting his Coinbase stake was a small part of the fundraise. She added, "Bitcoin is a decentralized technology that required no funding, and Epstein was evidently a skeptical investor."
Kadan Stadelmann of Komodo predicted retail consumers won't change habits, but some might leave Coinbase for exchanges without "unsavory sources." He surmised Epstein might have liked Coinbase's IPO prospects.
Antulio Rosales, a professor studying crypto, suggested Epstein was drawn to cryptocurrencies' potential for markets "without any ethical commitments or pressures of social norms and the law."
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