Newly unsealed documents from the Jeffrey Epstein case have revealed previously unknown connections between the convicted sex offender and the cryptocurrency industry. The documents show Epstein made significant investments in Bitcoin during its early development stages and invested $3 million in Coinbase in 2014, years after his 2008 conviction for soliciting prostitution from a minor.
The revelations come as millions of files related to Epstein have been published by the U.S. Department of Justice. These documents illuminate Epstein’s role as an early financier of Bitcoin development, stemming from his position as a major donor to the Massachusetts Institute of Technology. Over 20 years, MIT accepted more than $800,000 from Epstein, who also facilitated over $7 million in donations from other wealthy individuals.
Epstein’s MIT connections led to his involvement with the Digital Currency Initiative, an offshoot of the Media Lab tasked with researching and developing open-source cryptocurrency technologies. Communications between Epstein and then-MIT Media Lab director Joichi Ito reveal that Epstein’s donations were used to underwrite the initiative’s launch, serving as what Ito described as the principal home and funding source for Bitcoin development.
In 2014, Epstein made a $500,000 investment in Blockstream, a prominent Bitcoin-focused technology company. Email communications show Blockstream’s co-founders, Adam Back and Austin Hill, were invited to meet Epstein at his private Caribbean island. Blockstream maintains that Epstein was a limited partner in an investment fund and that the company has no direct financial connection to Epstein or his estate.
The Coinbase investment was brokered by Brock Pierce, a former child actor and co-founder of Tether, the world’s largest stablecoin issuer. Documents reveal Coinbase co-founder Fred Ehrsam liaised with Pierce about Epstein’s investment and sought to meet with Epstein if convenient. Additional filings suggest Epstein sold half his Coinbase shares to Pierce’s Blockchain Capital firm for $15 million in 2018.
The cryptocurrency industry response to these revelations has been muted. Some industry observers see Epstein as a skeptical investor who exited prematurely, while others claim he was attempting to undermine Bitcoin. Most analysts predict few consequences for crypto companies given the passage of time and decentralized nature of the technology.
Bitcoin developer Luke Dashjr has called for Adam Back to resign from his role as Blockstream’s CEO over these ties. Dashjr argues that Epstein’s interest in Bitcoin included attempts to undermine the network and early companies.
Experts suggest Epstein’s interest in cryptocurrency may have stemmed from its potential for operating outside traditional financial oversight. The technology’s ability to facilitate transactions without ethical commitments or legal pressures may have held appeal for someone seeking to move money beyond conventional channels.
The documents raise questions about due diligence in early cryptocurrency investments and the industry’s willingness to accept capital from controversial sources. However, with Bitcoin now a multi-trillion-dollar asset class and Coinbase a publicly traded company, the practical impact of these revelations remains unclear.