Newly unsealed Justice Division paperwork reveal that Coinbase co-founder Fred Ehrsam was concerned in emails concerning a $3 million funding from Jeffrey Epstein in 2014, lengthy after Epstein’s preliminary conviction.
Whereas Epstein’s stake was lower than 1% and he held no governance function, the information present Ehrsam expressed curiosity in a gathering through the funding spherical.
The recordsdata present that Epstein’s staff had direct communication with Ehrsam, a member of the Coinbase Board of Administrators and co-founder, who mentioned a doable assembly in New York associated to a $3 million funding.
“I’ve a spot between midday and three PM immediately, however once more, not essential for me, however can be good to satisfy him if handy. Is it necessary for him?” Ehrsam wrote in an e-mail chain that included representatives from crypto entrepreneur Brock Pierce’s VC agency, Blockchain Capital. In the identical thread, one other e-mail states that Epstein was “in a full afternoon board assembly yesterday.”
Coinbase didn’t return a request for remark.
In an e-mail dated Dec. 2, 2014, Pierce — the kid actor turned entrepreneur who later co-founded Block.one, which in flip launched CoinDesk dad or mum Bullish International in 2021 — contacted Epstein about a chance to spend money on Coinbase’s Collection C fundraising spherical.
Pierce, who additionally co-founded Tether and reportedly had a prolonged relationship with Epstein, wrote, “On one other diligence name with the co-founder. First shut occurred immediately. Spherical ought to be totally dedicated by Wednesday. $12M / 20% of the spherical could be taken. That is essentially the most platinum-plated deal within the house.”
That very same day, Epstein sought recommendation from LinkedIn co-founder Reid Hoffman on whether or not to take part within the spherical. Hoffman replied that he didn’t have deep perception into Coinbase and suggested towards collaborating, writing, “I most likely wouldn’t play.”
However Epstein ended up investing within the firm individually from Blockchain Capital.
Emails from Blockchain Capital co-founder W. Bradford Stephens dated Dec. 3, 2014, state that Blockchain Capital supposed to take a position roughly $3.25 million in Coinbase, unfold throughout three affiliated entities.
Throughout the identical e-mail chain, Epstein’s longtime affiliate Darren Indyke recognized the investing entity as “IGO Firm, LLC, which is a USVI restricted legal responsibility firm.”
A valuation report dated Dec. 31, 2014, included within the DOJ launch lists a transaction described as “Buy of Coinbase through IGO LLC (3,001,000),” and lists Coinbase as an funding held by way of IGO LLC in that quantity.
‘Alternative to take a position’
As extra companies and people named within the Epstein paperwork have sought to distance themselves from him, authorized and reputational danger has turn into a key concern. In 2023, JPMorgan Chase and Deutsche Financial institution paid a mixed $365 million to settle lawsuits introduced by Epstein’s victims, who alleged the banks enabled his sex-trafficking operation by offering monetary providers.
Towards that backdrop, Blockchain Capital, which is extensively referenced within the paperwork, stated the unique fund funding was by no means accomplished.
Blockchain Capital didn’t reply to a CoinDesk request for remark, however in an emailed assertion to Decrypt, a consultant stated, “In 2014, Brock Pierce was in touch with Mr. Epstein in relation to fundraising. As a part of these discussions, a chance to spend money on Coinbase’s Collection C was additionally mentioned through e-mail.”
The consultant added {that a} fund funding “was by no means consummated,” and that Epstein as an alternative invested independently by way of IGO Firm LLC.
Nevertheless, a number of years later, Blockchain Capital tried to purchase Epstein’s stake within the crypto alternate.
In January 2018, Blockchain Capital initiated discussions with Epstein’s affiliate, Indyke, about buying the Coinbase place held by way of the LLC. “We might be keen to purchase the place from you at a $2b [billion] valuation,” Stephens wrote, including that Blockchain Capital would pay roughly $15 million for the stake.
Later emails present negotiations centered on promoting half of the Coinbase place held in IGO LLC. Indyke wrote that Epstein believed the corporate’s worth exceeded $3 billion and that he had acquired “two different bids” for the stake.
On Jan. 31, 2018, Stephens responded that Blockchain Capital’s provide to purchase 50% of the place at a $4 billion valuation remained open.
“The worth for the 50% curiosity is $14,666,667,” Stephens wrote, a value that may indicate a achieve of greater than $11 million on the portion of the Coinbase stake offered, in response to the emails. In a Feb. 1, 2018 e-mail, Indyke confirmed settlement to the transaction, writing, “Jeffrey agrees that he’ll promote you 50% of his LLC.”
A valuation report dated Aug. 31, 2018, stated Epstein had offered half of his Coinbase stake, saying “50% offered for $15mm [million] Feb 2018.”
Epstein was arrested on federal intercourse trafficking expenses on July 6, 2019, and was held on the Metropolitan Correctional Heart in New York Metropolis. He died by alleged suicide on Aug. 10, 2019, after being discovered unresponsive in his cell.
