2014 Email Reveals Blockstream CEO Pressured Epstein to Divest from Ripple and Stellar

TLDR:

• Austin Hill told Epstein that Ripple and Stellar were “bad for the ecosystem” Blockstream was building.
• Blockstream co-founders demanded Epstein reduce his allocation due to competing protocol investments.
• Joi Ito and Reid Hoffman were copied on the 2014 email discussing strategic investor alignment issues.
• Gary Gensler taught crypto at MIT while Ito facilitated Epstein donations to the same institution.
  

Newly surfaced correspondence from 2014 shows Jeffrey Epstein held an investment allocation in Blockstream, a Bitcoin infrastructure company.

The email from CEO Austin Hill to Epstein reveals strategic pressure to divest from competing protocols Ripple and Stellar.

The communication, which included MIT Media Lab Director Joi Ito and investor Reid Hoffman, demonstrates active enforcement of ecosystem loyalty among early cryptocurrency investors.

Strategic Investor Conflicts in Early Blockchain Development

Austin Hill’s July 31, 2014 email to Epstein outlined a direct request from Blockstream’s co-founders. According to the original message, Hill stated he had “been asked by the other cofounders to reduce or take your allocation away.”

The CEO explained that Ripple and Jed McCaleb’s new Stellar “are bad for the ecosystem we are building.” Hill further noted that having investors “backing two horses in the same race” would damage the company’s strategic positioning.

The correspondence treated Epstein as a strategic investor whose portfolio choices affected Blockstream’s governance and capital strategy.

These were not incidental social exchanges but direct operational communications about investment policy. The email exchange occurred during a critical period for blockchain technology development when competing visions for distributed ledger architecture were taking shape.

Blockstream positioned itself around Bitcoin and the Lightning Network infrastructure. Meanwhile, Ripple’s XRP Ledger and Stellar represented alternative approaches to distributed ledger technology.

These competing protocols created tensions among investors and developers about which system would become the dominant base layer for cryptocurrency transactions.

The involvement of Joi Ito added another dimension to these networks. As MIT Media Lab Director from 2011 to 2019, Ito served on multiple technology boards and advised governments on digital policy.

His presence in the email chain demonstrated connections between cryptocurrency investment decisions and academic institutions researching blockchain technology.

MIT Connections and Regulatory Developments

Ito’s role at MIT Media Lab positioned him as a bridge between cryptocurrency investors and academic research. The lab expanded corporate funding under his leadership while focusing on AI, digital identity, and cryptocurrency projects.

Epstein’s ties to MIT later became controversial when 2019 reporting revealed the Media Lab had accepted donations linked to him. Ito resigned after admitting errors in judgment regarding these financial relationships.

Gary Gensler taught cryptocurrency courses at MIT before his 2021 appointment as SEC Chairman under President Biden.

His academic work occurred within the same institutional environment where Ito facilitated donor relationships. The regulatory approach toward Ripple and other cryptocurrency projects would later become a defining feature of Gensler’s SEC tenure.

Rob Cunningham’s analysis on KUWL.show examined these overlapping relationships. His post noted that “Epstein functioned as a capital node in overlapping elite tech networks.”

The connections between Blockstream, MIT, and later regulatory actions suggest coordinated efforts to shape cryptocurrency market development according to specific ecosystem preferences.

The 2014 correspondence reveals that ecosystem competition extended beyond technical differences. Investor alignment and narrative control played substantial roles in early blockchain development.

Bitcoin infrastructure companies viewed alternative protocols as existential threats to their position as the primary decentralized rail for digital assets.

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