Newly released documents from the Justice Department have shed light on the involvement of Coinbase co-founder Fred Ehrsam in discussions regarding a $3 million investment from Jeffrey Epstein in 2014, a time when Epstein was already a convicted sex offender. While Epstein’s investment represented less than 1% of Coinbase and did not afford him any governance role, communications reveal that Ehrsam showed interest in meeting with Epstein during the investment round.
The relevant emails include one from Ehrsam, who expressed availability for a potential meeting in New York, stating, “I have a gap between noon and 3 PM today, but again, not crucial for me, but would be nice to meet him if convenient. Is it important for him?” This conversation also involved representatives from Blockchain Capital, the venture capital firm founded by crypto entrepreneur Brock Pierce.
On December 2, 2014, Pierce reached out to Epstein to discuss an opportunity related to Coinbase’s Series C fundraising round. In his correspondence, he described the investment opportunity as “the most platinum-plated deal in the space,” noting that a first close had already happened and highlighting the urgency of getting commitments.
Epstein sought advice from Reid Hoffman, co-founder of LinkedIn, regarding his potential investment in Coinbase. Hoffman, lacking insight into the company, advised against participation, but ultimately, Epstein proceeded to invest through a separate entity, IGO Company, LLC.
Records indicate that Blockchain Capital was eyeing an investment of approximately $3.25 million in Coinbase at the same time. Following the transaction, significant concerns arose about reputational risks associated with any affiliations to Epstein. In light of these revelations, Blockchain Capital later attempted to negotiate a purchase of Epstein’s stake in Coinbase in 2018, revealing the complex ties between the crypto community and Epstein.
During the negotiations, Epstein’s associate conveyed that he believed Coinbase’s value exceeded $3 billion and that Epstein had already received other offers for his stake. Ultimately, an agreement was reached in February 2018 to sell half of Epstein’s investment, confirming a successful, albeit complicated, financial transaction amidst the surrounding controversies.
Epstein was arrested in July 2019 on federal sex trafficking charges and died a month later. As the fallout from Epstein’s actions continues to impact many institutions, these documents underscore the intersections of finance, reputation, and the ethical considerations that entrepreneurs must navigate in their business dealings.