Newly unsealed Justice Department documents reveal that Coinbase co-founder Fred Asum was implicated in emails regarding a $3 million investment from Jeffrey Epstein in 2014, long after Epstein’s first conviction.
Although Mr. Epstein had a less than 1% stake and no governance role, records show Mr. Arsam was interested in meetings during the funding round.
The files show that Mr. Epstein’s team communicated directly with Mr. Eltham, a Coinbase board member and co-founder, to discuss a possible meeting in New York in connection with the $3 million investment.
“I have free time between noon and 3 p.m. today, which is also not important to me, but I would be happy to meet him if it suits me. Is that important to him?” Arsam wrote in an email chain that also included representatives from cryptocurrency entrepreneur Brock Pierce’s venture capital firm Blockchain Capital. In the same thread, another email states that Epstein “was present throughout yesterday afternoon’s board meeting.”
Coinbase did not respond to a request for comment.
In an email dated December 2, 2014, Mr. Pearce (child actor turned entrepreneur who later co-founded Block.one and launched CoinDesk’s parent company Blish Global in 2021) contacted Mr. Epstein about the opportunity to invest in Coinbase’s Series C funding round.
Pearce, who also co-founded Tether and reportedly had a long relationship with Epstein, wrote: “In another conference call with co-founders. The first closing took place today. The round should be fully committed by Wednesday. We will receive $12 million, which is 20% of the round. This is the most platinum-plated deal in this space.”
The same day, Epstein asked LinkedIn co-founder Reid Hoffman for advice on whether to participate in the round. Hoffman responded that he had no deep insight into Coinbase and advised him not to participate, writing, “I probably won’t play.”
However, Epstein ended up investing in the company separately from Blockchain Capital.
A December 3, 2014 email from Blockchain Capital co-founder W. Bradford Stephens states that Blockchain Capital plans to invest approximately $3.25 million in Coinbase across three affiliate companies.
In the same email chain, Epstein’s longtime colleague Darren Indyke identified the investor as “IGO Company, LLC, a USVI limited liability company.”
A December 31, 2014 valuation report included in the Department of Justice release lists a transaction labeled “Purchase of Coinbase via IGO LLC (3,001,000)” and lists Coinbase as an investment held through IGO LLC in that amount.
“Investment Opportunity”
Legal and reputational risks have become key concerns as more companies and individuals named in Epstein’s documents seek to distance themselves from him. In 2023, JPMorgan Chase & Co. and Deutsche Bank paid $365 million to settle lawsuits brought by Epstein’s victims who alleged that the bank enabled Epstein’s sex trafficking operations by providing financial services.
Against this backdrop, Blockchain Capital, which is widely mentioned in the document, stated that its initial fund investment was never completed.
Blockchain Capital did not respond to CoinDesk’s request for comment, but in an emailed statement to Decrypt, a representative said, “In 2014, Brock Pierce contacted Mr. Epstein regarding financing. As part of those discussions, Coinbase’s Series C investment opportunity was also discussed via email.”
The representative said the investment in the fund “was never completed,” adding that Epstein instead invested independently through IGO Company LLC.
However, a few years later, Blockchain Capital attempted to purchase Epstein’s stake in the cryptocurrency exchange.
In January 2018, Blockchain Capital began discussions with Epstein’s associate Indyke about purchasing Coinbase positions held through an LLC. “We would like to purchase the position from you at a valuation of $2 billion,” Stevens wrote, adding that Blockchain Capital would pay approximately $15 million for the stock.
Subsequent emails show negotiations focused on selling IGO LLC’s half of its Coinbase position. Indyke wrote that Epstein believed the company was worth more than $3 billion and had received “two other bids” for its shares.
On January 31, 2018, Stevens responded that Blockchain Capital’s offer to buy 50% of the position at a valuation of $4 billion still stands.
“The price of the 50% interest is $14,666,667,” Stephens wrote in the email, which would represent a profit of more than $11 million on the portion of the Coinbase shares sold. In a Feb. 1, 2018 email, Indyke confirmed his agreement to the deal, writing, “Jeffrey agrees to sell 50% of the LLC to you.”
A valuation report dated Aug. 31, 2018, said Epstein sold half of his Coinbase shares, “50% sold in February 2018 for $15 million.”
Epstein was arrested on federal sex trafficking charges on July 6, 2019, and was held at the Metropolitan Correctional Center in New York City. He died of a suspected suicide on August 10, 2019 after being found unresponsive in his cell.
