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DOJ Files Show Epstein Claimed Contact With Bitcoin Founders

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DOJ Files Show Epstein Claimed Contact With Bitcoin Founders

Classified emails from the Department of Justice’s document release revealed Jeffrey Epstein claimed direct contact with Bitcoin’s creators as early as 2016.

Summary

  • DOJ emails show Epstein claimed talks with Bitcoin founders on a Sharia-compliant crypto idea.
  • The claim remains unverified as Bitcoin’s creator has never been publicly identified.
  • Files show Epstein’s deep ties to early crypto discussions across tech and finance.

A October 13, 2016 email from Epstein to recipients Raafat Alsabbagh and Aziza Alahmadi discussed using Bitcoin technology to build a Sharia-compliant digital currency for the Middle East.

The email, sent from Epstein’s address, stated he had spoken to “some of the founders of bitcoin” who were “very excited” about the project.

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The claim remains unverified, as Bitcoin’s (BTC) pseudonymous creator Satoshi Nakamoto has never been publicly identified.

Earlier DOJ documents show Epstein received Bitcoin-related materials dating back to April 2013, when Boris Nikolic forwarded him analysis from Tren Griffin discussing Bitcoin’s properties as a payment mechanism.

Epstein’s crypto network stretched across tech and finance

The DOJ files show Epstein maintained connections to prominent figures in technology and finance who were active in early cryptocurrency discussions.

A July 31, 2014 email from Austin Hill to Epstein, carbon copied to Reid Hoffman and Joichi Ito, discussed concerns about Stellar’s launch and its relationship to Ripple.

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Hill’s email carried the subject line “Stellar isn’t so Stellar” and raised concerns that investors backing both Ripple and Stellar created conflicts within the ecosystem.

The correspondence was carbon copied to Hoffman, a LinkedIn co-founder and prominent tech investor, and Ito, who served as director of MIT Media Lab at the time.

The April 2013 forwarded email from Boris Nikolic contained analysis from Tren Griffin, who wrote extensively about Bitcoin’s use as a payment mechanism and its relationship to network effects.

Griffin’s analysis noted that Bitcoin’s value depends on the number of users and that the asset had no intrinsic value beyond what participants assigned to it.

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Sharia currency proposal remains unverified

Epstein’s 2016 proposal described creating two new currencies, one Sharia-compliant, designed for internal use among Muslims in the Middle East.

The email suggested the digital currency would function like a dollar but incorporate religious compliance requirements.

The documents are part of a broader DOJ release containing approximately three million files related to Epstein’s associates and business dealings.

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Researchers continue examining the collection for additional references to cryptocurrency involvement.

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Crypto World

CFTC Staff Share FAQ on Crypto Collateral

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CFTC Staff Share FAQ on Crypto Collateral

The US Commodity Futures Trading Commission has given more details on its expectations for the use of crypto as collateral amid a pilot program that the agency launched last year.

In a notice on Friday, the CFTC’s Market Participants Division and Division of Clearing and Risk responded to frequently asked questions that emerged from two staff letters issued in December that established a pilot allowing crypto to be used as collateral in derivatives markets.

The notice reminded futures commission merchants wanting to take part in the pilot that they must file a notice with the Market Participants Division “which includes the date on which it will commence accepting crypto assets from customers as margin collateral.”

The crypto industry has argued that crypto technology is best suited for 24-7 trading and instant settlement, and the CFTC’s guidance in December clarified what tokenized assets can be used as collateral, along with how to value them and calculate how much is needed for a trading position.

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CFTC aligns guidance with SEC

The CFTC made clear its guidance was to align with the Securities and Exchange Commission, as the two agencies work together on a regulatory framework for crypto.

The CFTC said that capital charges, the amount that must be held to cover losses, would be “consistent with the SEC” and that futures commission merchants should apply a 20% capital charge for positions in Bitcoin (BTC) and Ether (ETH), while stablecoins should get a 2% charge.

Source: Mike Selig

The notice added that futures commission merchants taking part in the pilot can only accept Bitcoin, Ether, or stablecoins for the first three months and must give prompt notice of any significant cybersecurity or system issues. They must also file weekly reports of the total crypto held across customer account types.

After the three-month period, other cryptocurrencies can be accepted as collateral and the reporting requirements will end.

Related: SEC interpretation on crypto laws ‘a beginning, not an end,’ says Atkins

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The notice also clarified that “only proprietary payment stablecoins may be deposited as residual interest in customer segregated accounts” and that futures commission merchants can’t accept other cryptocurrencies for that purpose.

The CFTC said that crypto and stablecoins cannot be used for collateral of uncleared swaps, but swap dealers can use tokenized versions of an eligible asset if it meets regulatory requirements and grants the holder the same rights in its traditional form.

Meanwhile, derivatives clearing organizations can accept crypto and stablecoins as initial margin for cleared transactions if they meet CFTC requirements regarding minimal credit, market, and liquidity risks.

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