Newly disclosed Justice Department documents reveal that Coinbase co-founder Fred Ehrsam was involved in emails regarding a $3 million investment from Jeffrey Epstein in 2014, well after Epstein’s initial conviction.
While Epstein’s stake was less than 1% and he held no governance role, records show Ehrsam expressed interest in a meeting during the funding round.
The files show that Epstein’s team had direct communication with Ehrsam, a Coinbase board member and co-founder, who discussed a possible meeting in New York regarding a $3 million investment.
“I have a gap between noon and 3 p.m. today, but again, that’s not crucial for me, but it would be nice to meet him if it suits me. Is that important to him?” Ehrsam wrote in an email chain that included representatives from crypto entrepreneur Brock Pierce’s venture capital firm, Blockchain Capital. In the same thread, another email states that Epstein was “in the middle of a board meeting yesterday afternoon.”
Coinbase did not return a request for comment.
In an email dated December 2, 2014, Pierce — the child actor-turned-entrepreneur who went on to co-found Block.one, which in turn launched CoinDesk parent company Bullish Global in 2021 — contacted Epstein about an opportunity to invest in Coinbase’s Series C fundraising round.
Pierce, who also co-founded Tether and reportedly had a long relationship with Epstein, wrote: “On another diligence call with co-founder. First close took place today. Round expected to be fully committed by Wednesday. $12 million / 20% of round can be closed. This is the most platinum deal in the space.”
The same day, Epstein sought advice from LinkedIn co-founder Reid Hoffman on whether to participate in the round. Hoffman responded that he did not have extensive knowledge of Coinbase and advised against participating, writing: “I probably wouldn’t play.” »
But Epstein ended up investing in the company separately from Blockchain Capital.
Emails from Blockchain Capital co-founder W. Bradford Stephens dated December 3, 2014 indicate that Blockchain Capital intended to invest approximately $3.25 million in Coinbase, spread across three affiliated entities.
In the same email chain, longtime Epstein associate Darren Indyke identified the investing entity as “IGO Company, LLC, which is a USVI limited liability company.”
An appraisal report dated December 31, 2014, included in the DOJ release, lists a transaction described as “Purchase of Coinbase through IGO LLC (3,001,000)” and lists Coinbase as an investment held through IGO LLC for that amount.
“Opportunity to invest”
As more companies and individuals named in Epstein’s documents seek to distance themselves from him, legal and reputational risks have become a major concern. In 2023, JPMorgan Chase and Deutsche Bank paid a total of $365 million to settle lawsuits brought by Epstein’s victims, who alleged the banks enabled his sex trafficking operation by providing financial services.
Against this backdrop, Blockchain Capital, widely cited in the documents, stated that the fund’s initial investment was never completed.
Blockchain Capital did not respond to a request for comment from CoinDesk, but in an emailed statement to Decrypt, a representative said: “In 2014, Brock Pierce was in contact with Mr. Epstein regarding fundraising. As part of these discussions, an opportunity to invest in Coinbase’s Series C round was also discussed via email.”
The representative added that an investment in a fund “was never made” and that Epstein instead invested independently through IGO Company LLC.
However, a few years later, Blockchain Capital attempted to buy out Epstein’s stake in the crypto exchange.
In January 2018, Blockchain Capital began discussions with Epstein associate Indyke regarding purchasing the Coinbase position held through the LLC. “We would be willing to buy the position from you for a price of $2 billion. [billion] valuation,” Stephens wrote, adding that Blockchain Capital would pay around $15 million for the stake.
Subsequent emails show negotiations focused on selling half of Coinbase’s position held in IGO LLC. Indyke wrote that Epstein believed the company was worth more than $3 billion and that he had received “two other offers” for the stake.
On January 31, 2018, Stephens responded that Blockchain Capital’s offer to buy 50% of the position at a valuation of $4 billion remained open.
“The price for the 50% stake is $14,666,667,” Stephens wrote, a price that would imply a gain of more than $11 million on the portion of Coinbase’s stake sold, according to the emails. In a February 1, 2018 email, Indyke confirmed his agreement to the transaction, writing: “Jeffrey agrees to sell you 50% of his LLC. »
A valuation report dated August 31, 2018 indicates that Epstein sold half of his stake in Coinbase, saying “50% was sold for $15 million.” [million] February 2018.”
Epstein was arrested on federal sex trafficking charges on July 6, 2019, and held at the Metropolitan Correctional Center in New York. He allegedly committed suicide on August 10, 2019, after being found unconscious in his cell.
