Epstein Ties Surface in Early Bitcoin Industry Investment

Documents in the latest tranche of files linked to disgraced financier and convicted child sex offender, Jeffrey Epstein, reveal that the founders of Bitcoin infrastructure firm Blockstream, Adam Back and Austin Hill, were invited to Epstein’s notorious island in 2014 following Epstein’s investment in their then fledgling firm.

Back is known as a pioneer in the world of cryptography and was famously one of the first people contacted by Bitcoin creator Satoshi Nakamoto during his efforts to create his new cryptocurrency. Back’s 1997 proof-of-work based spam prevention software, Hashcash, ultimately served as the direct inspiration for Bitcoin’s mining mechanism. 

Back and Hill’s company, Blockstream, is currently an important infrastructure developer in the Bitcoin ecosystem, having been behind the development of the Bitcoin sidechain, the Liquid Network.

The contact between Epstein and the Blockstream founders began with an email sent to Hill on April 15, 2014, in which Epstein asked Hill to call him and provided a phone number. Hill responded via email two hours later, saying he’d tried to call, but Epstein wasn’t available to speak.

In the email exchange, Hill told Epstein he’d be unable to attend a planned meetup in New York, but added that “Fri/Saturday on the island are still possible.”

Epstein later emailed another early Bitcoin developer, Amir Taaki, on Saturday, April 19, 2014, saying he had “Adam Back on my island this weekend.” ‘Andy Back’ here is likely a reference to Adam Back — Epstein’s emails are riddled with typos and other obvious mistakes.

Yet another email exchange between Epstein and Hill shows that the felon (he’d been listed as a sex offender since 2008) had been invited to attend a comedy event in Montreal called “The Nasty Show,” with Back, Hill and other Blockstream staff members, but ultimately couldn’t attend.

Hill emailed Epstein the day after the show to let him know the Blockstream staff were “well entertained.” In November of 2014, an Italian venture capitalist named Vincenzo Iozzo emailed Epstein to ask what he thought of Back — Epstein responded with just two words, “like him.”

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Back Explains Epstein Links, Doesn’t Mention Island Visit

In a post on X / Twitter on February 2, Back sought to explain his and his company’s links to Epstein, characterising their relationship as strictly financial.

“In 2014, during Blockstream’s seed-round investor roadshow, the company was introduced to then MIT Media Lab director Joi Ito. Subsequently Blockstream met with Jeffrey Epstein, who was described at the time as a limited partner in Ito’s fund. That fund later invested a minority stake in Blockstream,” Back explained.

Back said the financial ties between Epstein and Blockstream were short-lived. The fund Epstein had contributed to divested its ownership stake in Blockstream after just a few months. “A few months later, Ito’s fund divested its Blockstream shares due to a potential conflict of interest, and other concerns.”

Blockstream has no direct nor indirect financial connection with Jeffrey Epstein, or his estate.

Adam Back, Blockstream co-founder

Notably, Back’s explanation didn’t mention anything about his apparent visit to Epstein’s notorious Caribbean island, Little Saint James.

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Former MIT Media Lab Ito’s links to Epstein were confirmed in a 2019 letter in which he wrote that he came to know Epstein in 2013 through his fundraising work managing MIT-linked funds. Ito also claimed his links with Epstein were strictly business, saying he’d never witnessed anything inappropriate in his interactions with the disgraced financier. 

“I want you to know that in all of my interactions with Epstein, I was never involved in, never heard him talk about, and never saw any evidence of the horrific acts that he was accused of,” Ito claimed in his letter.

Other files released last week have revealed that Epstein was also an early investor in the cryptocurrency exchange Coinbase, contributing US$3 million (AU$4.2m) back in 2014 when the company was valued at around US$400 million (AU$569m). Epstein later sold half his investment in Coinbase to Blockchain Capital in 2018 for US$15 million (AU$21m).