Epstein Invested 3.25M$ in Coinbase: Emails

Emails published by the US Department of Justice reveal that an entity linked to Jeffrey Epstein invested $3.25 million in Coinbase in 2014. This investment was made in the form of 195,910 Series C shares during the company's $400 million valuation. Coinbase executives are stated to have been unaware of Epstein or the ultimate beneficiary. This development brings hidden connections among early investors in the crypto sector to light.

Epstein emails with accountant Richard Kahn and Blockchain Capital co-founder Bradford Stephens. Source: Justice.gov

Coinbase Series C Round Details and Epstein LLC

In the email from Blockchain Capital founder Bradford Stephens to Epstein's advisor Darren Indyke, it is stated that the name of the investing LLC would be changed and $3 million wire instructions were attached. This amounts to approximately 0.81% stake at a $400 million valuation. Coinbase's growth at that time paralleled BTC detailed analysis; the exchange was rapidly increasing BTC trading volume.

Epstein-Linked Participation in Blockstream Seed Round

Epstein-linked entities also participated in Blockstream's $18 million seed round. This round strengthened Blockstream, a pioneer in Bitcoin sidechain technologies. Epstein's indirect influence is evident in early Bitcoin infrastructure investments.

Epstein emails with Richard Kahn and Bradford Stephens. Source: DOJ

Epstein emails with Richard Kahn and Bradford Stephens. Source: Justice.gov

2018 Coinbase Position Sale and Valuation Analysis

In 2018, Stephens purchased half of Epstein's Coinbase position for $15 million at a $2 billion valuation. The original $3.25 million investment reached a value of $30 million for the full position – approximately 9x return. Blockchain Capital co-founder Brock Pierce was also involved in the transactions. This aligns with an exit strategy consistent with the maturation of the BTC futures market.

Technical Examination of Epstein Emails

The emails show Darren Indyke's instructions to change the LLC name, indicating the use of offshore structures in crypto investments. Wire transfers highlight regulatory gaps at the time. Coinbase's unawareness emphasizes the early-stage weaknesses in KYC/AML processes.

Regulatory Risks and Lessons in the Crypto Sector

These documents expose hidden connections of high-profile investors, increasing the need for VCs to conduct due diligence. It poses a reputation risk for exchanges like Coinbase; even during BTC rallies, past shadows can affect the market. Investors should question fund sources when conducting BTC detailed analysis.