Recently released U.S. Department of Justice emails suggest Jeffrey Epstein, the late financier and convicted sex offender, obtained exposure to early cryptocurrency ventures through intermediaries, including an investment in Coinbase. According to the documents, an entity linked to Epstein may have invested about $3.2 million in 2014, with records indicating the purchase of 195,910 Series C shares for a total of $3.25 million when Coinbase was valued at $400 million.
The materials do not show that Coinbase executives had direct contact with Epstein or were aware of the ultimate beneficial owner of the investment at the time.
In a Dec. 4, 2014 email, Bradford Stephens, the founder and managing partner of Blockchain Capital, wrote to Darren Indyke, an associate of Epstein, stating that they would determine which LLC would make the $3 million investment, update the name of the investing entity accordingly, and included wire instructions.
Epstein emails with his accountant Richard Khan, and Blockchain Capital co-founder, Bradford Stephens. Source: Justice.gov
The latest disclosures also indicate that Epstein-linked entities participated in the $18-million oversubscribed seed round for blockchain technology firm Blockstream. The investment was executed through three separate entities: Crypto Currency Partners II LLC, Crypto Currency Partners II LLP, and Crypto Currency Partners LP.
Epstein emails with his accountant Richard Khan, and Blockchain Capital co-founder, Bradford Stephens. Source: DOJ
DOJ emails indicate Epstein sold half of his Coinbase stake in 2018 for $15 million
Four years after the initial deal, in early 2018, Stephens approached Epstein to acquire part of the Coinbase position. The documents show an offer to buy roughly 50% of the stake at a $2 billion valuation, proposing $15 million for about half of the interest originally obtained for approximately $3 million.
In a Jan. 20, 2018 message, Stephens noted the investment had been made at a $400 million valuation, that the company had recently raised at a $1.6b valuation, and proposed to purchase the position at a $2b valuation for $15 million.
In a Feb. 22 email, Brock Pierce, co-founder of Blockchain Capital, wrote that $15 million had been wired for half of the Coinbase position, indicating that the remaining equity was valued at around $15 million alongside cash proceeds. The DOJ releases include multiple references to Pierce in connection with cryptocurrency investment discussions involving Epstein-linked entities.
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