Convicted sex offender Jeffrey Epstein invested $3 million into the cryptocurrency start-up Coinbase in 2014, according to documents released by the Justice Department on Friday, giving him a small role in the rise of what is now a $51 billion public company and the largest U.S.-based crypto exchange.
The documents suggest that Epstein, a financier who maintained contact with tech figures including Microsoft CEO Bill Gates and Tesla CEO Elon Musk, had access to competitive Silicon Valley investment opportunities even after he pleaded guilty in 2008 to two charges of soliciting prostitution, including one involving a minor. Epstein’s investment was part of a $75 million round of funding for Coinbase that also included top Silicon Valley venture capital firms such as DFJ and Andreessen Horowitz, according to the documents and company statements about the funding.
Epstein took his stake in Coinbase three years after the start-up’s founding, according to the documents, when cryptocurrency was an obscure but fast-growing industry. His investment represented a stake of less than 1 percent of the company, and he had no role in its governance. Coinbase declined to comment and DFJ didn’t respond to a request for comment. Andreessen Horowitz did not immediately respond to a request for comment.
The documents describing Epstein’s crypto investment were among 3 million pages the Justice Department released Friday to comply with a federal law passed in November that requires the disclosure of files from the federal investigations of Epstein. The deadline was Dec. 19. Deputy Attorney General Todd Blanche said at a news conference on Friday that this tranche of files is expected to be the final major release of materials. Epstein died in federal custody in 2019 awaiting trial on charges of sex trafficking minors in Florida and New York.
The documents released Friday include emails from December 2014 between a lawyer who worked with Epstein and investors at Blockchain Capital, a venture fund that specializes in crypto. One of the firm’s investors, Brock Pierce, an early bitcoin investor and former child actor, asked Epstein in one email whether he wanted to invest in Coinbase through Blockchain Capital.
“I have gotten us allocation if you’re interested and able to move fast,” Pierce wrote in the December 2014 email. “Are you available to talk to the co-founder who is spearheading the financing today?”
In a separate email chain that month, Coinbase co-founder Fred Ehrsam discussed meeting Epstein with Pierce and his Blockchain Capital colleague Brad Stephens, according to the documents released on Friday. “Would be nice to meet him if convenient,” the Coinbase co-founder wrote.
It is unclear from the emails whether Ehrsam ever met or corresponded directly with Epstein. Ehrsam, who left Coinbase in 2017 but continues to serve on its board, didn’t respond to a request for comment.
Days later, Stephens emailed Coinbase to say that Blockchain Partners would invest $3.25 million in Coinbase, according to the documents. He then forwarded wire transfer instructions from Coinbase to an attorney who worked with Epstein, in an email that referred to a $3 million investment. The attorney replied that it would be made by IGO LLC, a Virgin Islands company.
An internal valuation report on Epstein’s assets at the end of 2014 released by the Justice Department lists a $3,001,000 “Purchase of Coinbase via IGO LLC” under a section for cash transactions — making the investment a fraction of his total wealth, which the document said was $419 million at the time. Other documents released Friday show Epstein owned and controlled IGO.
Blockchain Capital said in an emailed statement that Epstein invested $3 million in Coinbase “independently” and that it parted ways with Pierce in 2017. Pierce did not respond to a request for comment. The documents show Pierce subsequently emailing Epstein updates about Coinbase’s growth and making plans to meet in New York, Puerto Rico and Florida.
Documents released from investigations of Epstein have shown that he actively curated connections in elite tech and finance circles, where early enthusiasm for cryptocurrency flourished. An earlier release of documents by the Justice Department showed that donations Epstein made to an academic lab at the Massachusetts Institute of Technology went toward a bitcoin initiative.
Epstein still held his stake in Coinbase in 2017, according to an internal valuation the Justice Department released last week. A January 2018 email shows that Stephens at Blockchain Capital offered to buy half of Epstein’s Coinbase investment.
In February 2018, according to another valuation report of Epstein’s assets, he sold half his stake in Coinbase for $15 million, about 10 times what he paid for that fraction of his investment in 2014. Blockchain Capital confirmed the transaction.
Just over a year later, Epstein was arrested on federal sex-trafficking charges.
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