Blockchain Capital was basically a surrogate fund to funnel Epstein's investments into early-stage Bitcoin companies, and Brock Pierce himself kind of seemed to serve this liaison role, uh, matching Epstein with potential investments.
I don't think he was looking to, like, influence Bitcoin core development because like I said, he's funding Gavin Andresen and the other guys at MIT, and then he's also funding Blockstream.
And plus Bitcoin, the way it works inherently is meant to avoid that kind of manipulation in the first place because it is this open source system where anyone can contribute.
Even if he tried to do that, I don't think it would work. Welcome back to the Blockspace Pod, brought to you by CleanSpark. Was Jeffrey Epstein trying to write Bitcoin regulations?
Did he co-opt Core, or was he simply trying to steer Bitcoin early-stage startups like Coinbase and Blockstream, or all of the above?
Or was he just trying to keep his fingers on the pulse of things going on with Bitcoin? There's a lot to unpack in the most recent Epstein files dump.
So for today's show, we have veteran Bitcoin journal Kyle Torpey on to do just that.
Kyle has had some fantastic original reporting on the Epstein files, unearthing some things that no one else was able to find, like the fact that Epstein met with Ben Lawsky, the architect of the infamous BitLicense in twenty fourteen, and an interesting investor letter from Coinbase's Brian Armstrong that relates to the block size wars.
You will not want to miss this episode if you're interested in Bitcoin history and lore and want to figure out what exactly was going on with Bitcoin in the Epstein files.
So give this one a listen if you're interested in those. We will be right back. [upbeat music] Kyle Torpey, welcome to the Blockspace podcast, sir. How you doing? I'm well. Thanks for having me.
I've been following your work for a while. B-pretty big fan. This is a, I don't know, meeting of minds for me in some senses.
I feel like we've been, uh, you know, running in the, the same circles with, with Bitcoin journalism for a while, and we've never actually had an in-person conversation or virtual one, so I'm happy we could finally, uh, strike that off the list.
Uh, I wish it were over something maybe a little more lighthearted, [chuckles] but, you know, we take what we can get in the news cycle.
It-- And to kick it off, you know, we've done some coverage at Blockspace of the Epstein files.
We had a live stream the week that they were released, and I did a, a, an article for Blockspace for the newsletter last week, kinda covering some of the more high level and more interesting parts of it.
Uh, not coming at the best time 'cause Bitcoin just puked to like sixty K, so I don't think people were that glued to this. They were glued to the price chart.
But to, to start us off, can you give us a rundown of maybe like some of the most salient things you found in the filings and things that you think are the most important for people to take a look at? Yeah, I can...
I'll just kinda go through like how I came into going through the files and stuff.
So they were released on that Friday, I think, and then I started seeing stuff about Bitcoin and Blockstream that Saturday, I guess, little over a week ago.
And people were saying this is like proves Epstein, like, created Bitcoin and, like, Epstein was involved with Blockstream and telling them what to do and all that kind of stuff. Uh, and it was coming from...
You know, I think anything with the Epstein files, you kinda have to look into it for yourself 'cause there's a lot of like crazy kinda accusations that get thrown around, stuff too just from someone's name being in the files.
They're like, "Oh, this guy's obviously needs to be arrested now." Uh, so with like the Blockstream angle especially, like they were very relevant at the time of the block size wars,
which is something I covered heavily at Bitcoin Magazine and Forbes. So I kinda wanted to see if there was like any specific discussion around that.
So I just went to the DOJ website, typed in block size, different like hard fork, just like different terms that would, you know, bring up anything relevant.
And the first thing that came up, I think the only thing I found, was a investment letter sent by Coinbase CEO Brian Armstrong, you know, just like a regular routine, seemed like monthly letter he would send out to anyone who invested in the company.
And it was during the block size. Well, I forget the actual date, but it was around the time Bitcoin Classic was like the big push, I think. Bitcoin XT was the original hard fork proposal from
Gavin Andresen, and Mike Hearn was involved with that as well, too, like early prominent Bitcoin developers.
And he was-- Armstrong in the email is talking about how they're like working behind the scenes to make sure, and yeah, you can see right there, that, you know, the Bitcoin network and their view of what it should be used for is not gonna be held back by any early idealists who think it should remain like as decentralized as possible.
So I mean, there was a lot of companies, Coinbase wasn't the only one at the time, who were very interested in the use of Bitcoin for payments, which we still see some today, but it's more on like the secondary layers with like Lightning net-network and stuff like that.
But these-- a lot of these companies were building around, you know, doing these on-chain payments that weren't necessarily gonna scale over the long term. So they had these entire business models built around,
you know, Bitcoin on-chain payments that were eventually were gonna run out of space on the blockchain, and we saw that the next year with the fees going up and everything. So that was the first thing,
you know, I really saw, and I just thought it was interesting because it wasn't necessarily like a big revelation 'cause everyone knew Coinbase, they were like pretty loud at the time about how we needed to increase the block size limit and stuff like that.
But to see it like laid out that bluntly and clearly to his investors, where it's like we're working behind the scenes and we're gonna, you know, we're gonna get this hard fork passed in the next...
I think he, he also says like in the next month or two, I think there's gonna be a hard fork. Obviously, it never happened. And so yeah, then the obvious next step from thatOh, so- I'm sorry, Kyle.
Quick, just to put a pin in that thought really quickly, 'cause I just wanna highlight this for those who might not know the history as well.
For, for SegWit2x, can you break down what SegWit2x was and the New York Agreement that Coinbase was a part of, correct? Yeah.
So this was before, before the New York Agreement and SegWit2x, there was, like, multiple hard fork proposals. There was, as I said, Bitcoin XT, and then Bitcoin Classic, and then Bitcoin Unlimited,
and they just weren't getting enough support from the general Bitcoin user base. So finally, a bunch of companies got together
and said, "We're gonna need some kinda compromise, and we're just all gonna say we're gonna do the hard fork, and we're gonna do it a year from now," and that was the so-called New York Agreement.
Coinbase was one of the companies that signed. It was the major exchanges, major blockchain providers, like blockchain.info, and something like 90, around 90% of the hash rate.
So it was, like, pretty much all of the big players in this space were, uh, pushing for it. Notably, the Bitcoin Core developers were not pushing for it at all. They were, like, the, one of the main...
Basically, the tech- the Bitcoin Core technical community was not, uh, for that at all. So then
the compromise was supposed to be SegWit, the segregated witness change, which is a soft fork to slightly increase the block size limit and do a technical change that fixed some bugs with the, how the Lightning Network works.
So it's basically a way to make sure that would be a, you know, a scaling path going forward as well. And then, uh, the hard fork was supposed to happen, like, six months after that, just to... It's unclear.
It's really unclear, like, why, because I guess it was just to appease the people that were holding back on SegWit, um, because for, they wanted, like, more block space as well.
So, like, everybody pretty much wanted SegWit, and the people that were holding out basically were holding out because they were like, "No, we need to do SegWit and this hard fork."
So the compromise was basically to do both, but they weren't done, they weren't gonna be implemented at the same time, which creates the question of it was, if it was just, like, a way for some people to save face
so they could just, like, do SegWit first and then kinda be- abandon the hard forking part after that. Yeah, and it failed at roughly, like, circa, like, November 2017, right?
Um- Yeah, there was, uh, Eric Voorhees and a couple of other signatories from the agreement sent out a email to the mailing list that was like, "We're gonna, we're not gonna support this anymore."
I think that was, like, a l- a month before it was supposed to activate.
And then I think some people were still looking to activate it anyways, and there was some kinda bug in the code where there was, like, a one, off-by-one error where it would've caused some kind of network issue.
I forget the specifics on that, but I remember that happening as well. Just to your point, a crazy thing to pop up in the Epstein files, [laughs] you know. You don't really expect that.
I don't think anyone had that on their bingo card, even with, you know, people seeing some of the ties to Bitcoin developers in the first dump that the DOJ did last year. Right.
I think that's the most interesting part about a lot of this, though, to what you're saying, is there are just these little tidbits of Bitcoin trivia and lore that you can unearth from this, like the fact that Brock Pierce was trying to purchase Mt.
Gox back in 2014 before it went belly up. Right. Yeah. Just wanted to lay that out for people who might be confused about what exactly we're talking about within Bitcoin history, 'cause that was 10 years ago.
So continue- Yeah... with some of the more interesting things that you found or, or your insights.
So once I found that and, like, put it out, and that was, like, kinda interesting, the obvious next question was why is there email from Brian Armstrong,
an investor letter to Coinbase investors in the Epstein files, and why is it being sent to Jeffrey Epstein? And it was being forwarded to him by Brock Pierce.
Uh, and so then I went down that rabbit hole a little bit and just kinda tried to go through more of their emails and more emails related to Coinbase, and was eventually able to see that Epstein had sent Pierce an email.
Or no, Pierce sent Epstein an email being like, "I need to know if you're gonna get into this Coinbase deal. Um, I need to know by the end of the day 'cause they're gonna end this round of funding."
And Epstein tells Brock to, you know, put in $3 million for him. And then it looks like later on, I wanna say 2018 maybe, there's more interactions with them and Blockchain Capital,
where, you know, there's, they're helping Epstein offload half of the shares for $15 million, around there. Um, I think Blockchain Capital did say the deal did not go through them in that...
'Cause there was, like, a Decrypt article that came out that Monday as well that kinda summarized all the Coinbase stuff.
But, I mean, it look- it looked like, from what I saw, it was, like, all going through Brock Pierce and Blockchain Capital.
Yeah, I mean, from everything that I've picked out too, you can go, there's actually Deutsche Bank transaction records, and if you go through for February 2018,
a month after they were discussing buying Epstein's stake, originally they wanted to do 100%. They settled on 50% for 15 million, like you said.
But there are three different payments totaling 15 million to what's called the 2017 Caterpillar Trust, which I assume is related to Epstein. I actually haven't been able to find too much about that trust.
There are a few articles out there that link it to Epstein, but it, it, it's, it lives in that universe of all of these shell companies that, that Epstein and his, and his cabal used to shuffle money back and forth, right?
And they might be able to say that Blockchain Capital didn't do it because it was one of their funds.
So Blockchain Capital has, like, all these, they call them cryptocurrency partner LPs, and it's, like, all of the different tranches that they would use to deploy.
So, like, I think the first year was, like, it was the first LP, and then the second year is the second LP.
They actually set up, I think, a different LLC for Epstein's purchase specifically, which is another thing that was really popular, is they would set up a shell company, like an LLC, and then that would bu- they would, you know, they'd use the LLC to invest into a company like Blocks, like Coinbase.And then,
you know, Blockchain Capital is basically asking if they can buy that LLC because that's, that's who holds the shares.
So it's interesting to look into the, the files and see this, uh, how, how these money games are played with all these shell companies.
This is something that Whitney Webb and Mark Goodwin have been really good about in their reporting on the Epstein files, or really Whitney Webb specifically for Epstein, how he would use money and, and shuffle it around.
But it's interesting that Blockchain Capital is trying to push back on that because as you said, in the files, like, the paper trail is very clear.
There's nothing definitely linking that fifteen million dollar payment necessarily to this. Like, there's no memo in the Deutsche Bank files.
Like, there's one for a Blockstream investment, which we'll get to later, but there's no memo directly linking those.
But the fifteen million coming just after they talked about spending fifty million on this, coming from Blockchain Capital, you know, maybe it was something else, but if you put two and two together, it seems pretty clear that that's probably what that was for.
Yeah. But, and then, yeah, other than the Coinbase connection,
after that, I think it was a couple days later even, I was just kind of searching the files again with, like, more random keywords, and I was thinking to myself, like, "Who's someone from, like, Bitcoin's early history or past that might be
in the files in some way or another?" So I was trying a few names, and one of the first names I thought of was Benjamin Lawsky,
who was the architect of the BitLicense in New York, which was, like, the first major regulation around Bitcoin. There wasn't even really, like, a crypto industry back then. It was still, like, mainly just Bitcoin.
And that was in the state of New York, and they had-- they were having hearings at the time, and they were gonna develop this license where if you wanted to do anything related to Bitcoin and other digital currencies, you need to have this license.
And it was perceived as, like, a very onerous regulation at the time. I remember there was companies, I wanna say ShapeShift was one of the main ones.
They would do this thing where since they didn't wanna get their BitLicense, they would instead, on their website, it would say, "Our services are available to everyone except in these locations," and it would say, "North Korea, Iran, and the state of New York."
[chuckles] So that's kinda how the regulation was perceived in the, in the Bitcoin industry. Uh, but anyways, Epstein did meet with Lawsky while he was putting together the BitLicense regulation,
and at the time, Epstein was obviously interested in Bitcoin as well.
There's another email where he's talking about Lawsky needs to give Bitcoin, like, a-- there'd be no state tax on, state sales tax on Bitcoin transactions or something like that.
Obviously, Lawsky went on to, after this, join the board of Ripple and be involved with some of the companies that he was creating regulations for in the first place. NYDIG was another one of the companies. Mm-hmm.
And they ended up getting a BitLicense, like, seven or nine months after Lawsky joined the company, so. [gentle music] We are CleanSpark,
America's Bitcoin miner, a publicly traded company with the largest operating hash rate, powered entirely by self-operated infrastructure across four states. This is our proof of work.
We are setting the standard for what's next. Learn more about the intersection of energy and Bitcoin at cleanspark.com. Yeah, and it's hard to overstate how
hostile the BitLicense was to doing business in New York for Bitcoin and crypto companies. I mean, to your point about ShapeShift, I remember early on, for a while thereafter, it was implemented.
Like, basically any crypto service you could imagine would have that disclaimer where it's like- Yeah... we don't, we don't service New York residents, right?
And there were a few, I think, like, Coinbase probably had one early on. I, I would be shocked if they didn't.
I could be totally wrong about that, but it was a very select few, you know, who were blessed to, [chuckles] to have this license to operate- Yeah... in the state of New York.
I remember Gemini was one of the first ones too, 'cause their whole thing at the time was, "We're gonna be, like, the trusted name in Bitcoin for the next hundred years," or something like that.
So they wanted to be, like, the most regulatory compliant exchange. So I remember them being, like, one of the first ones, the Winklevoss twins and, uh, Gemini.
And the Winklevoss twins actually brought Pierce a conduit for Epstein and the Winklevoss twins. He met with, I think, Tyler. Yeah. It's unclear if anything really came of that.
I saw the emails that were like, I think Epstein reached out and was like, "Do you know the Winklevoss twins?" Yeah. And Brock was-- There was, like, some maybe they were gonna meet up or something, but.
Yeah, they probably met at some point, but it doesn't look like anything came of it.
I think that's another really important caveat for a lot of this is just because someone met with Epstein, that doesn't necessarily mean they were doing anything illegal or, like, morally horrendous. Right. Right?
It's just, this guy had a lot of money.
Early stage Bitcoin companies struggled to even have banking relationships, so anyone saying that they're going to fund your startup, w- you know, you're gonna give them the time of day.
But going back to the note about him requesting for tax advantageous legislation for Bitcoin, how do you square that with what we ended up getting with the BitLicense?
I mean, I know this is all speculation, but, like, what's your read on why, you know, ostensibly Epstein was maybe meeting with Ben Lawsky regarding the BitLicense or just regulation in general, but he also seemed to take maybe a lenient or, or was encouraging a lenient stance on the taxation front?
Well, to be clear, the taxation email, that was, like, s- an email he sent to the person that I think of as the same person that eventually set up the meeting with, uh, Lawsky for him.
Lawsky came to Epstein's home for the meeting, I think, later that year. So, uh, you know, it's unclear exactly what they talked about when they met.
Um, and I'd say it's, like, unclear, like-It's hard to get Epstein's, like, complete thoughts on Bitcoin just from, like, all these random emails where he's saying, you know, there's some where he's like, "Bitcoin's interesting, but there's all these problems I see with it, and it needs to be fixed."
So, like, but I mean, what does he mean there? Does he mean, like... Back then, like, that could mean so many different things.
People thought, like, Tether was a way to do Bitcoin right or something like that, like, which completely, like, throws out the whole point of Bitcoin.
So that kinda gets into, like, what his actual thoughts were on Bitcoin, and I'm not, you know... That it's kinda unclear to me.
Yeah, you're not a cl- you're not clairvoyant, so you can't reach into the mind of- Right... a dead man, right? So is there anything else that you...
'Cause I think the, just to highlight the Ben Lawsky thing, and, and kudos to you for just conjuring that name out of the air and thinking, "Well, this guy was important.
Let's see what he [chuckles] if he was talking to Epstein." Well, it was like, 'cause those are the kinds of people that are all over the files. It's like the people- Mm-hmm...
that work in government, create regulations, and then go work for the very companies that they just wrote regulations for.
So it's like there's not, uh, I mean, you could say there's not a lot of direct connection with a lot of these people in terms of the kinda activities Epstein was into, that he was charged for, but there's still these people that are, like, willing
to, you know, further their own ends by working with him and not really caring about any of that stuff.
And so, like, someone who's gonna go work in government, create a license, and then effectively profit off that by working for these companies that are gonna get regulated with the same regulations that he created.
There was even an email that I also shared underneath the original Lawsky one where it's, like, someone marketing an investment in NYDIG, uh, to Epstein, and,
like, in the, in the marketing materials it says, you know, "We have the best regulatory compliance. We're gonna work with regulators.
We even have this guy that invented and created and architected the BitLicense is on our board," or whatever his role is at, was at NYDIG. I forget the e- exact role.
So, like, he's going into government, creating a license, and then profiting off it by, you know, working with the, those same companies. Yeah, I've got those tweets up here. Let's go ahead and read this really quickly.
You say here, "I also found..." So actually, let me back up really quickly for those who haven't seen the original. This is on Kyle's X account. Highly recommend go and follow him. A great reporting on this.
And like I said, this is just, I think, a great find, and the fact that you just dug this up, that, y- uh, he says, you tweet here, "At the time, Lawsky, uh, according to emails in the DOJ files, Jeffrey Epstein met with New York Superintendent of Financial Services, Ben Lawsky, in 2014.
At the time, Lawsky was developing the BitLicense for the New York Department of Financial Services."
And then down in this second tweet, you say, "Also found an email forwarded to Epstein that appears to be an explainer on NYDIG.
During a time the fund was raising money, Lawsky is touted as the creator of the BitLicense." And this email says, um, [tsks]
"The fund is audited by Ernst & Young," I believe this is the NYDIG fund, "the only crypto fund Ernst & Young audit globally and administrated, administrated by the Bank of New York.
Stone Ridge are also working closely with the SEC.
Stone Ridge is NYDIG's parent company, as they go through the registration process to make sure they are comfortable with all the facets of the fund and ensure the fund is SEC registered.
It will likely be the first fund of their type to achieve this status.
They also have work and have dialogues with the regulators, which is very important, and count Ben Lawsky, the ex-Superintendent of Financial Services for New York State and the creator of BitLicense as the first regulatory scheme for the digital currency business, as their head of regulatory affairs."
Z- e- just going back to kind of something we've already highlighted, it's the, I think one of the real values of this is just seeing how these laws, how these regulations, and how these money flows kind of move in the background without people realizing it.
You know, if Jeffrey Epstein was involved in some way with [chuckles] with coaxing on or, or, or ushering in the BitLicense, that would be, would give us a very clear indication of maybe his, you know,
of some of his motives with getting involved with some of these companies. We can obviously, we don't know, because there's, we only get so much from these filings.
Let's touch on Blockstream really quickly, and then I wanna get to MIT. Um,
we won't cover too much about, I mean, if you, like, Google or if you go to the Epstein files and you look up Austin Hill, one- the co-founder of Blockstream, he's kinda all over it. Yeah.
I don't wanna necessarily get into, like, what that means for him personally, because I think what, at least for me, what's more interesting is just looking at how Epstein approached these companies and how he approached some of the people in the companies to make connections with other Bitcoiners in early stage startups in the space at the time.
But going back to Blockstream, and there's an MIT tie-in here, too, because Epstein ended up investing in Blockstream through Joi Ito, who was the director of the MIT Media Lab at the time.
They set up a joint LLC, I think it's called the Kigari Investment Fund. Uh, Joi, she put in, like, two grand.
Uh, at, one of Epstein's shell companies put in half a million and then a dollar, so, like, 500,000 and a dollar, and they funneled that money to Blockstream.
Adam Back has claimed that that fund divested their shares shortly after due to a conflict of interest.
Who knows if that's because, you know, maybe someone at Blockstream actually figured out who funded, who, who was, you know, offering the money, and they said, "No, thank you." We don't really know what's behind that.
They didn't confirm this, but it looked like there was a conflict of interest because either Ito or Epstein were investing in Stellar. So I don't know if, there was, like, a, one of Austin Hill's- Interesting...
email was, like, an email to Ito, Epstein, and I think Reid Hoffman as well, 'cause Reid Hoffman was an investor in Blockstream also. And he- Why would that be a conflict of interest for their investment in Blockstream?
Obviously, there's the conflict where Stellar has its ownDigital currency at its, at its, on its L1. And then so Blockstream's trying to build out basically everything on Bitcoin with its own token.
I mean, Blockstream never really had any success with, like, their liquid side chain thing, but part of what that's used for and what they thought it was gonna be used for is, like, a lot of the tokenization type stuff, and that they even say some of that in the, uh, email.
So I think it would, it would be more, probably more they see Stellar as a competitor to Liquid, would be my interpretation of it.
So yeah, and then Adam Back, who's the CEO of Blockstream now, even said there was a conflict of interest, and that, that, that specific email from Austin Hill lines up with what he's saying basically.
Now, that doesn't mean it's all... that's what happened, but there's, like, supporting evidence for that being the case. Yeah, that... Thank you for that color.
I had not seen anything about this, uh, Stellar or Ripple in the file.
Well, I saw that 'cause, like, all these Ripple people were saying, like, this proves that Epstein was using Bitcoin to attack Ripple and all this, like, crazy stuff. And, like, it actually looks like more the opposite.
Like, Epstein was invested in Ripple or Stellar based on this email. [chuckles] Right. That's what I find really funny about this. I mean, the... If you go to, like, the BCash subreddit- Oh, yeah. I'm sure. [chuckles]...
or, or which, like, which subreddit is, like, co-opted by B... Is it, is it r/BTC or is it r/Bitcoin? Yeah. Which one? Like- r/BTC is the one that splintered off from r/Bitcoin- Yeah. Okay. So-...
back during the block size war. Yeah, if you go to r/BTC and then I guess r/BitcoinCash as well, they've been on this trail for a long time. I don't know when.
I think it maybe goes back to the original findings of MIT's ties to, to Epstein. There have been dumps of the files throughout the years, you know, and little glimpses- Yeah... behind the curtain.
This is obviously the most thorough one yet.
But going back to what you were saying about the Ripple people using this as a kind of, you know, as proof or evidence of Epstein trying to crush their, their, you know, their beautiful little Ponzi coin over there.
The same thing with a lot of- Yeah... people in the Bitcoin Cash community. Some even, I would say, within the, like, kind of the Filter or Notts community now as well- Oh, for sure...
talking about how, you know, there are all these enclaves basically pointing to the files and saying Epstein was driving Bitcoin development, Core is compromised, et cetera, and there's not- Yeah, I mean, that's been one of the more interesting parts of all this to me, following, like, the actual files.
It's like how each little offshoot, like you said, that's not really Bitcoin is, like, using it to say Bitcoin's hijacked and all that kind of stuff. And you know, I've been...
I kinda stopped interacting with the Notts people just 'cause they were getting so ridiculous.
Like, they're just not gonna listen, so it's like they can just fork off the network, I guess, if they wanna keep going down this path and learn the hard way like the Bitcoin Cash people had to, had to learn.
But one of the points I was making to them over and over again is, like, they're doing the same exact thing that the big blocker, big Bitcoin Cash people were back in the day.
They're just coming at it from, like, a different angle.
So, like, you could say the Bitcoin Cash and even, like, more the crypto people, like Ethereum people, were, like, very progressive in how they wanted the, the network to, to develop from, like, a technical development standpoint.
So they wanted, like, all this tokenization stuff. They wanted bigger block size for more on-chain payments, all that kinda stuff. And so, which just, like, didn't make any sense, and now the... and so they...
a lot of them became, like, Blockstream conspiracy theorists basically saying they're, you know, controlled by the banks or whatever it was back then.
And now the Notts people are doing sort of the same thing, but they're saying...
they're coming f- to it f- from more like a, uh, conservative angle, where they're saying Bitcoin has to only be used as money, and we have to, you know, implement this so strictly that we might even, you know, end up limiting some of the functionality with some of these layer twos that need more expressive scripting at the base layer
for Bitcoin itself to scale as money. So it's like, uh, they're doing, like, the same sort of thing from, like, the opposite angle, which I think is really interesting just from, like, a s- psychology standpoint.
And so yeah, I've seen a lot of that. And with the Ripple people, like I said before, they're just all kind of... I don't know. I mean, it's... And they're... Uh, it's also, like, it's just the, this righteous cause.
Like, they think they're protecting Bitcoin. It was the same kinda thing with the Bitcoin Cash people where they're like, "We need to," you know.
Makes me think of Roger Ver talking about, you know, babies are dying because they can't use Bitcoin on chain at, for, you know, pennies, for transaction fees that are pennies. You know, it's all- Right...
very wild stuff. Yeah, I don't wanna get, like, all down that Notts rabbit hole because it's so- No, we don't, we don't have to... stupid.
[chuckles] And then my, my co-host, Charlie Spears, will be happy to not do it 'cause he's been very f- front and center in the ordinals and inscriptions world, and so he was...
He's been caught in the crossfire about all of the Filter war stuff- Okay. Yeah... and, you know. And I kinda just sit by, you know.
I'm not as invested in it n- like, literally and, and emotionally in terms of the inscription stuff, so I just kinda sit back and chuckle. But maybe that's the wrong, the wrong approach.
I wanna maybe close on MIT, but since we're kind of already talking about it, I wanna just go kinda push further into the realm of speculation.
One take I've heard is if you look at the way that Epstein moved money and the way that he tried to broker influence across anything, and this might include Bitcoin, you see him taking both sides of an argument or both sides of a position or funding both sides of some sort of, you know, axis of, of, of political thought in the US.
And I think one way that some people that I've talked to about this who have been deep in Bitcoin for a while, they're reading-Epstein's involvement with Blockstream and also Coinbase exerting influence and injecting capital into MIT is maybe a way to put chips on every single player and, and with the hopes of either betting on the right one that comes out on top or even potentially stoking conflict between these different parties within the Bitcoin ecosystem.
And specifically, the block wars has kind of become one of the things that people point to, I think, to show that he was trying to play both sides of this with Blockstream and Coinbase. Does it- do you buy that?
Does that make any sense to you? Have you seen anything that would indicate that that might be the case, or you think that's just pure speculation, kind of game theorizing this?
It does see- I mean, he does seem like he was using his money to gain influence in a lot of ways, too, not necessarily just making investments for, you know, the purpose of making money.
But like you said, I mean, yeah, but when the original release came out last year, that was another thing where people hopped on it orig- originally and were like, "See, this proves that Bitcoin Core is corrupt because they were funded by MIT, who was funded by Epstein."
Um, but it's like, well, at the time, Gavin Andresen was the one pushing for Bitcoin XT, which was a different implementation, which would, like, have hard forked the network and created an entirely different network.
So the idea that it was, like, Bitcoin Core or small blockers didn't make any sense. And when it comes to that, when it comes to the block size stuff specifically, I think he was probably not
necessarily thinking about that as much. I think he was just... This was, like, a new...
The simplest explanation would be, like, this is a new technology, and he just wanted to invest in these various companies that were starting at the time.
And then I think when you look at it from that perspective, it, it would make sense that he would have, you know, investments on different sides because he wasn't even considering that aspect of it.
That would be my assessment of, of that.
I don't think he was looking to, like, influence Bitcoin Core development 'cause, like I said, he's funding Gavin Andresen and the other guys at MIT, and then he's also funding Blockstream.
And plus, Bitcoin, the way, the way it works inherently is meant to avoid that kind of manipulation in the first place 'cause it is this open source system where anyone can contribute. So, like, he wouldn't...
Even if he tried to do that, I don't think it would work. All right, I'm gonna put the tinfoil hat on and play Alex Jones a little bit. So Gavin Andresen met with the CIA and Epstein in June of 2011.
The Bitcoin XT hard fork or, or proposal comes out in June 2015.
I mean, it's four years separation, but if you wanted to go down the rabbit hole and, again, kind of get cosmic with the conspiracy, you might ask the question, was there anything said to Gavin during those CIA meetings and with Epstein that would have maybe influenced him to go this route?
From what you know about Gavin, do you think this is just him doing what he was gonna do regardless? I mean, I know that he, it used to be- I mean, I never-... out of favor.
I definitely disagreed with Gavin a lot on technical stuff. One of the things that was also in that Coinbase investor letter that was sent to Epstein
was this concept of miner voting, which Brian Armstrong was talking about a lot at the time. He was like, "This is how Bitcoin upgrades.
We, you know, propose this hard fork, and then if the miners vote to pass it, then it passes."
But that's not really how it works when it comes to hard forks, as we saw over and over again with the various hard fork proposals.
Now, it is true in terms of soft forks, if you get a bunch of miners to support it, like if 95% of miners are supporting a soft fork, it's gonna go through smoothly, but you still need, like, the consensus of the nodes.
The timing, I mean, it's coming four years after he met with the CIA and with Epstein, but- Oh, right, the CIA. Okay. Yeah. Maybe, but I think I, I would go back to the point where, like, it...
If that did happen, it didn't work because Gavin was removed f- as lead maintainer once he started saying Craig Wright is Satoshi. So, like, no one took him seriously after that.
And he, I mean, he was already not being taken seriously by a lot of the core developers at the time because of he was, like, pushing this hard fork so hard, and it, like, clearly didn't have consensus from the other developers.
But it almost doesn't matter in the sense that it was too ridiculous that no one took it- Yeah... seriously. So, like, even if you- It's similar to, like- Go ahead...
similar to, like, when people try to say someone is Satoshi. Like, there was a lot of nonsense about Epstein is Satoshi. It's like it doesn't...
At this point, it doesn't even matter because the network has, like, been running for so long, and it's completely open source, and so many changes have been made over the years. And, like, it's, it's...
Everything's out in the open when it comes to actual development work on the protocol. So yeah, I mean, you can go down those rabbit holes if you want. I used to go down a lot of...
When I was a younger man, I used to listen to a lot of Alex Jones. [laughs] And I mean, it can be fun, and I even, like, learned some things I didn't know from people like Alex Jones. But I don't know. If it doesn't...
See, if it doesn't, like, actually matter because Gavin got removed anyways, so I, I don't really... It's kind of a waste of time to try to figure out, like, what was going on there to me.
What, what do you think is worth kind of cluing into outside of what we've talked about, though?
Is there anything in, in the files that you think, outside of the things that you brought to light, that you think are like, this is still relevant, this is still important?
Like, I can't really think of Brock Pierce as still being relevant. It is in- insane and fascinating that he was in contact with Epstein basically from, like, 2010 up until 2018, and he, and he was- Right...
a sur- you know, his blockchain capital was basically a surrogate fund to funnel Epstein's investments into early stage Bitcoin companies, and Brock Pierce himself kind of seemed to serve this liaison role- Yeah...
matching Epstein with potential investments, but... Well, I mean, Brock Pierce does have some-Accusations himself from a very long time ago. So maybe it's not, you know, completely crazy that he's in there so, so often.
Yeah. But I mean, the most interesting stuff to me is, you know, more of the stuff related to Bitcoin itself rather than, you know, people
communicating with Epstein after all these years 'cause they invested in his companies. I mean, yeah, maybe people should be removed from roles or whatever. I'm not- I don't really get into that very much.
I was just more interested in the, uh, Coinbase bit, specifically about how they were dealing with the block size war, and then Lawsky was just kinda interesting. I do think the, you know, all these bad
arguments that have been made based on them too is kind of the interesting part right now, as we were talking with, like, the Ripple and the Bitcoin Cash and the knots people.
Just seeing how people, like, take this information and then weaponize it to support their cause or whatever. I mean, uh, I mean, I brought, like, a lot of the Coinbase
stuff out from the files, but, like, I wasn't doing that to be like, "Oh, Coinbase is evil," and, you know, Epstein controlled Coinbase and they were attacking Bitcoin.
I was just like, well, no, this is, this is more just to point out that the arguments being made against Blockstream don't make any sense.
Like, if you're gonna say -- if you're gonna make the argument against Blockstream, you have to do it for both sides. Right. That's a good point, and it's kinda like the Pink Floyd song, Any Colour You Like.
If you looked into the kaleidoscope of the Epstein files, you can probably see through any prism- Yes... some truth that you wanna pull out of the whole thing, right?
I mean, the worst -- I have to say this too, the worst one was Vinny Lingham. I don't know if you saw that one or if you know who Vinny Lingham is. No, that's-- Spill the tea.
What- Vinny had very bad takes for a very long time in this space, and he had the worst one- Yeah... of all this past week when he was like,
"Well, now I don't even know what to think," uh, you know, "Maybe Craig Wright is Satoshi, and I don't trust Adam Back anymore, and I'm gonna buy..." So he was, like, pumping Bitcoin SV, which is like- [laughs]
Dude, it's like 20 di- is it '20? Like, I don't think I've ever seen anyone in the space over the entire history. Yeah. Is it 2019 again? I mean, seriously. Yeah. And- It was just an insanely bad take.
Vinny Lingham famously of Civic, I believe, was the token, and they were- Yes... trying to push a vending machine where you would pay in Civic token. [laughs] Get... And I don't know- Yeah...
pay for your Doritos in a, in a coin that no one asked for and no one wants. Um- Yeah.
Well, Kyle, before, before we go, I wanna zoom in on MIT really quickly because maybe we should've led with this, but we kinda talked about it a good bit on our livestream and, and the stuff that you found I thought was more interesting, so I wanted to focus on that.
But Epstein reportedly gifted MIT, like, $825,000, which seems kinda low. I wonder if it's actually more. I would imagine it's actually probably more.
And 520, uh, 5,000 of that went to the MIT Media Lab, um, to Joi Ito, the director of the MIT Media Lab specifically for various things.
We know that maybe 120,000 of this was given to the Bitcoin Club in MIT, potentially for an airdrop where they gave, like, every MIT student $100 in Bitcoin at the time. Oh, right. Yeah. Something like that.
But Joi, she was in contact with Epstein for a long time. He ended up syncing Epstein up with now Bitcoin developer, then undergrad at MIT, Jeremy Rubin.
Jeremy also seemed to have been similar to Brock Pierce, a kind of liaison. He attempted to, uh, match Epstein up with Layer1, a Bitcoin miner, and LedgerX for investments.
I don't think either of those went through from what I've seen in the files. There was not confirmation, at least in this batch. But- Well, yeah, that was probably the-- I forgot about that one.
That was probably the funniest email I saw related to Bitcoin, where Jeremy's trying to pitch him on Layer1, which I think before they were... This is what Jeremy responded on X,
uh, 'cause people were saying it was actually supposed to be, like, kinda like Blockstream, but for Grin.
If you remember Grin, it was like an altcoin based on the MimbleWimble protocol, so it'd be, like, scalable and private.
So Layer1 was orig-originally allegedly supposed to be, like, the Blockstream of Grin, where they would buy a bunch of Grin in the initial token offerning, offering or whatever, and then, like, build out wallet infrastructure and other services and stuff around it.
So you'd basically be, like, in-increasing the value of the Grin tokens over time by, like, building- Interesting... on top of the protocol.
But that's the email where he says, "That seems like I have ethical concerns," or, "It can't be anything ethically bad because I don't wanna, you know, ruin my reputation."
Uh- Which is so, is hilarious, obviously, considering- Yeah, yeah... what we know about his actual moral fiber. But, but he apparently he didn't wanna invest in shitcoins.
So a quick redaction from me there then, I, I assumed that it was the Bitcoin miner, Layer1. Seems like it was a different company entirely. It was.
Or- No, 'cause I was confused about that too, but on X, Jeremy said that that was the original idea with Layer1 was the Grin thing, and then they ended up, like, not even participating in Grin at all or something, and then they just pivoted to Bitcoin mining.
Got it. So I think it is the same company. Okay.
So what- 'Cause I remember seeing, like, outlandish claims about, like, how much of the hash rate they were gonna have and stuff like that around the time of the- For, for Grin or for Bitcoin? For Bitcoin- Okay...
if I'm, if I'm thinking of the same company, yeah. Okay. Well, what, what do you, what do you make of the MIT relationship in general? I mean,
i-is there anything particularly special here, or do you think it's just kinda par for the course with Epstein trying to, uh, you know, broker influence with these institutions?
Yeah, I mean, I, I, I would think it's an influence thing. I don't really... I know there's a lot of, like, stuff about, you know, tax-related reasons why you would maybe do that kind of stuff too.
But like I said, I mean, if he'sInvesting in MIT and Blockstream and Coinbase, it's like I'm not sure what he would be trying to do necessarily to influence Bitcoin.
There is the, um-- Before we came on, you were talking about the Chain Anchor protocol as well, which was like a paper out of MIT where they were talking about how to...
If I recall correctly, it was like how to incentivize Bitcoin miners to implement KYC/AML on all transactions. And so basically they would just pay,
give, uh, miners like an economic incentive by pay-paying higher fees to, uh, you know, force them to censor all non-whitelisted transactions or something like that.
And I did report on that at the time, and MIT was being kinda weird 'cause the original paper was all about Bitcoin and how it would be deployed on Bitcoin.
And then when I was talking to them, they were like, "Oh, we never wanted this to be deployed on Bitcoin at all. It's more of just like a general blockchain thing." I do-- I think that was...
I don't know if you can pull up, like, when... I don't even remember when this article I wrote was. But if you can pull up to the time, I think it was like 2017 or something. All right, so 2016, so it is
I guess in the same, you know, few years there. But as far as I know, like, nothing came of Chain Anchor. Um, I remember Peter Todd writing about it around the same time, just being like, "This is a terrible idea."
And I, I think it goes back to the same point where it's like this kinda ruins the whole pro- value proposition here in the first place, so we're not gonna...
There's no reason to adopt it, and just kinda went away pretty quickly after it first was revealed. Yeah, it's certainly interesting to at least ponder maybe how
Epstein's influence could have led to something like that, or maybe that's why he had an interest in MIT to begin with. This is all speculation. We don't know. Yeah. But if you look at the- I mean, it would go...
If you look at some of his emails where he's talking about there's problems with Bitcoin, and it needs to be fixed or whatever, maybe he thought, like, it needed to be regulated and have, you know, full KY- KYC/AML at the protocol level.
Like, maybe. Yeah, 100%. That would gel with how Bitcoin was explained to him in the beginning. I mean, he was going through Jason Calacanis. He has this funny email where he goes- It's JCal [laughs]. Yeah, right?
It, it's, it's hilarious, though. He, he emails J- uh J-J- uh, Calacanis, and he says, "I would like to meet the Bitcoin guys." And he ha- he does bit and coin as two separate words. Yeah.
And Jason Calacanis responds, you know, "Hey, by the way, these guys are like kind of Wiki- they're like WikiLeaks, you know, in the sense that they're kind of burn-it-all-down anarcho-capitalism, you know, we- Right...
you know, permissionless money," all that stuff.
And so in the early days, Epstein, especially with getting briefed on the subject, especially back then when most people only knew Bitcoin if at all via its use on the Silk Road, it would've been framed completely differently, I think, than the way that it's framed to most people today.
State actors wanting to have more controls over payment flows in Bitcoin makes a lot of sense. This is something- Right...
going back to the chain and anchor thing, this is still one of the largest risks to Bitcoin today in the sense of you look at Foundry being based in the US and like 40% of the hash rate coming from publicly listed companies.
That's a choke point for actually putting in some sort of transaction-controlling measure where you're whitelisting or blacklisting transactions that you don't want included, or rather transactions from, from blacklisted wallets that you don't want included in the blockchain.
This is kind of a tangent, but I actually think the AI expansions and pivots that we're seeing from public miners is probably the healthiest thing to happen to Bitcoin since the China mining ban.
You know, like we had Chinese miners- That's interesting. Uh, yeah, you know, occupying like 80%-ish, maybe more of the hash rate, gets banned. Most of that moves to the US.
You have another ch- another bottleneck, you know, another kinda choke point with the majority of the hash rate or just under the majority being here. Now a lot of those miners are just gonna...
They're n- they won't be doing it in four years, I don't think. They will have very negligible hash rate footprints if at all, and who knows where that hash rate's going to go.
But you've at least hopefully neutralized that, that threat vector. Um, if Foundry still has 30 to 40% of the hash rate though, it doesn't really go away. You really only need to go after the mining pools.
But, um- Yeah, I mean, there's been a lot of, a lot made out of like the quantum computing issue lately.
But I don't really s- I see the mining centralization issue as like much more immediate and potentially problematic 'cause like as you said, if the transaction templates, the block templates are not decentralized, then you can just kinda target a few entities and then start implementing AML, KYC like MIT was thinking about doing all those years ago.
What's be- even crazier to me is like back then, I assumed like that was definitely gonna be implemented on Tether. And Tether's...
Obviously, if you wanna redeem Tether via Tether, you still have to go through AML, KYC, but you can transfer it around without any of your personal information being tied to your USDT at all.
So I'm pretty shocked that's been allowed to keep going all these years. Yeah, and it seems like maybe some of that's coming with some of the Genius framework. I mean, Tether now has a compliant stablecoin. Yeah.
I think it's like USAT maybe, that they, that Anchorage Digital is like the first or the only issuer for it. Anchorage is federally chartered.
But going back to Tether, interestingly very, uh, sparsely mentioned in the Epstein files, and I think T- Tether has always had all sorts of conspiracy swirling around it.
I mean, if it's not-- if it wasn't the Tether is pumping Bitcoin's price, you know, that was a really- Right... popular argument from some of the fringe crypto-hating journalists back in the day. Oh, yeah.
I mean, I don't-- I mean, Bitfinex is still around apparently. I don't know if you're familiar with that X account. Y- yeah. I- isn't it, is it run by Cas Piancey or-Do you know who I'm talking about?
Oh, that would be funny if it was. Because he's- He's like the Protos. I think he writes for Protos. Yeah, yeah, he writes at Protos now. He blocked me a long time ago.
I don't [chuckles] remember what it was for, but it was like it was him- Bip36 account blocked me a long time ago, but then unblocked me once I'd started reporting on the Epstein stuff.
[laughs] So- Well, you know, there was this universe back then, not to get too in the weeds of, of the good old days before we got institutionalized. You can read that- Right...
any way you want, either Bitcoin being institutionalized or literally we're all going insane being in this industry too long.
[laughs] But, you know, um, it was like Amy Castor, David Gerard, I believe his name was, and Cas Piancey- Mm-hmm...
who were pushing this narrative that, you know, Tethers aren't backed by anything, and they're infl- artificially inflating Bitcoin's price. Right.
So I mean, that's pretty well discredited at this point, at least I would hope. I still think maybe Amy is somewhere kind of in her corner screaming to the world that Bitcoin's about to go to zero.
But there's a kind of a, a newer one that, you know, I, I, I don't wanna, like, throw shade on this one too much 'cause I think going back to, like, genius compliance, there might be a case here.
It's the idea that, like, a, a CBDC in the US would be in the form of a privately issued stablecoin that comes with these compliance measures that are approved by the state, basically.
I don't really have much else to say about this other than if that were the case, I'd expect Tether to be featured a little more prominently in these things if, like, you know, there was some conspiracy behind it.
But then again, maybe it just... it wasn't big enough at the time. Well, I mean, it just- Brock Pierce does mention it a little bit to Jeff- I'll be... Brock Pierce is a Tether co-founder. Yeah.
So, I mean- So, so he mentions it a few times, and I think he was trying to get...
Funnily enough, he was, uh, going back to the nuggets in here, he was trying to get Larry Summer involved with Tether, maybe, like, on the board or something like that. I think maybe- Yeah...
as, like, a seal of legitimacy for the project, as well as one of the, like- Yeah, like a Ben Bernanke type thing. [laughs] Yeah, yeah, exactly.
And then you have some other emails of someone explaining to Epstein how, how stablecoins work, but there's not really too much in there about Tether, which is... I was a little surprised.
Yeah, and I would imagine maybe Epstein was like, "This is too volatile," and I could see him being interested in something like Tether.
Did launch that, you know, regulatory compliant one version of their, uh, stablecoin in the US, but I don't know if anyone's gonna actually use that.
I think what they're doing in El Salvador is, like, much more interesting, and some people don't like... Some, like, Bitcoiners really don't like Tether 'cause it's like this centralized stablecoin or whatever.
But the reality is they hold a lot of Bitcoin, they keep buying Bitcoin, and I think longer term it would make sense. The reason, like, USDT is more interesting to me than, like, the regulatory compliant one is, like,
Bitcoin gives them kind of, like, a hedge against the US dominance over the world economic system. So, like, if, if they were completely backed by US Treasuries, the US could just seize their assets or whatever.
I think they're held at Cantor Fitzgerald, if I'm not mistaken.
So, like, Bitcoin is kind of a hedge against that US-centric system, where they could keep operating if they had enough Bitcoin to back their stablecoin over the long term, and that gets into, like, very, you know...
I, I think that kinda gets into, like, what Hal Finney was originally talking about way back in the day.
Like, one of his first responses to the Bitcoin paper was like, "Yeah, Bitcoin banks will actually make a lot of sense." Tether, one of the more interesting companies, man. They also have a huge mining arm.
You know, they're-- They have- Yeah... a hash rate that is close to or on par with some of the largest public miners in the US, and also they have, like, 140- I didn't know it was that much. Yeah, it's a lot.
They're very quiet about it. We're hoping to... We're, we're gonna have some, some content on that over the next month or so, but they also hold, like, 140 tons of gold, which is just insane.
All right, Kyle, we're running up on an hour here. Is there anything else that we didn't cover that you would like to double tap or tap, and final thoughts before we close out? Maybe a closing thought would be, you know,
don't believe everything an altcoiners telling you about Bitcoin being hijacked, whether it's, you know, the BCash people, the NOTs people who aren't...
I guess they're not technically altcoiners yet, but if they fork themselves off the network, they will be, and then the Ripple people. Think for yourself, I guess, instead of, you know,
listening to someone who's trying to sell you something. Well said. Kyle, where can people find you? Where can people find your work? I think my X account is the best place to follow me, just x.com/kyletorpey.
Well, Kyle, thank you so much for joining, man. It's great to see you, great to touch base. Hope you have a good week. You too. Yeah. Thanks for having me. [outro music]