Newly unsealed Justice Division paperwork reveal that Coinbase co-founder Fred Asum was implicated in emails concerning a $3 million funding from Jeffrey Epstein in 2014, lengthy after Epstein's first conviction.
Though Mr. Epstein had a lower than 1% stake and no governance function, data present Mr. Arsam was inquisitive about conferences throughout the funding spherical.
The recordsdata present that Mr. Epstein's group communicated straight with Mr. Eltham, a Coinbase board member and co-founder, to debate a doable assembly in New York in reference to the $3 million funding.
“I’ve free time between midday and three p.m. at present, which can also be not necessary to me, however I’d be blissful to fulfill him if it fits me. Is that necessary to him?” Arsam wrote in an e-mail chain that additionally included representatives from cryptocurrency entrepreneur Brock Pierce's enterprise capital agency Blockchain Capital. In the identical thread, one other e-mail states that Epstein “was current all through yesterday afternoon's board assembly.”
Coinbase didn’t reply to a request for remark.
In an e-mail dated December 2, 2014, Mr. Pearce (little one actor turned entrepreneur who later co-founded Block.one and launched CoinDesk's father or mother firm Blish World in 2021) contacted Mr. Epstein in regards to the alternative to put money into Coinbase's Collection C funding spherical.
Pearce, who additionally co-founded Tether and reportedly had an extended relationship with Epstein, wrote: “In one other convention name with co-founders. The primary closing happened at present. The spherical ought to be absolutely dedicated by Wednesday. We are going to obtain $12 million, which is 20% of the spherical. That is essentially the most platinum-plated deal on this area.”
The identical day, Epstein requested LinkedIn co-founder Reid Hoffman for recommendation on whether or not to take part within the spherical. Hoffman responded that he had no deep perception into Coinbase and suggested him to not take part, writing, “I most likely received't play.”
Nonetheless, Epstein ended up investing within the firm individually from Blockchain Capital.
A December 3, 2014 e-mail from Blockchain Capital co-founder W. Bradford Stephens states that Blockchain Capital plans to speculate roughly $3.25 million in Coinbase throughout three affiliate corporations.
In the identical e-mail chain, Epstein's longtime colleague Darren Indyke recognized the investor as “IGO Firm, LLC, a USVI restricted legal responsibility firm.”
A December 31, 2014 valuation report included within the Division of Justice launch lists a transaction labeled “Buy of Coinbase by way of IGO LLC (3,001,000)” and lists Coinbase as an funding held by IGO LLC in that quantity.
“Funding Alternative”
Authorized and reputational dangers have grow to be key issues as extra corporations and people named in Epstein's paperwork search to distance themselves from him. In 2023, JPMorgan Chase & Co. and Deutsche Financial institution paid $365 million to settle lawsuits introduced by Epstein's victims who alleged that the financial institution enabled Epstein's intercourse trafficking operations by offering monetary companies.
In opposition to this backdrop, Blockchain Capital, which is extensively talked about within the doc, said that its preliminary fund funding was by no means accomplished.
Blockchain Capital didn’t reply to CoinDesk's request for remark, however in an emailed assertion to Decrypt, a consultant stated, “In 2014, Brock Pierce contacted Mr. Epstein concerning financing. As a part of these discussions, Coinbase's Collection C funding alternative was additionally mentioned by way of e-mail.”
The consultant stated the funding within the fund “was by no means accomplished,” including that Epstein as a substitute invested independently by IGO Firm LLC.
Nonetheless, a couple of years later, Blockchain Capital tried to buy Epstein's stake within the cryptocurrency alternate.
In January 2018, Blockchain Capital started discussions with Epstein's affiliate Indyke about buying Coinbase positions held by an LLC. “We want to buy the place from you at a valuation of $2 billion,” Stevens wrote, including that Blockchain Capital would pay roughly $15 million for the inventory.
Subsequent emails present negotiations centered on promoting IGO LLC's half of its Coinbase place. Indyke wrote that Epstein believed the corporate was price greater than $3 billion and had obtained “two different bids” for its shares.
On January 31, 2018, Stevens responded that Blockchain Capital's supply to purchase 50% of the place at a valuation of $4 billion nonetheless stands.
“The value of the 50% curiosity is $14,666,667,” Stephens wrote within the e-mail, which might symbolize a revenue of greater than $11 million on the portion of the Coinbase shares bought. In a Feb. 1, 2018 e-mail, Indyke confirmed his settlement to the deal, writing, “Jeffrey agrees to promote 50% of the LLC to you.”
A valuation report dated Aug. 31, 2018, stated Epstein bought half of his Coinbase shares, “50% bought in February 2018 for $15 million.”
Epstein was arrested on federal intercourse trafficking fees on July 6, 2019, and was held on the Metropolitan Correctional Heart in New York Metropolis. He died of a suspected suicide on August 10, 2019 after being discovered unresponsive in his cell.
