The release of millions of documents under the Epstein Files Transparency Act has ignited a wave of conspiracy theories within the cryptocurrency community. A prominent claim circulating on social media platform X alleges that Israel secretly gained control of the Bitcoin network over a decade ago, with purported links to Bitcoin core developers, Blockstream, and Tether.
The claim originated from SwanDesk CEO Jacob King, who cited an alleged Epstein document suggesting conversations between Jeffrey Epstein and Japanese entrepreneur Joichi Ito about hidden gifts to Bitcoin developers. King further asserted that Israel paid the salaries of about 60% of Bitcoin core developers and that Epstein and Israel were major investors in Blockstream, enabling price and code manipulation.
However, a detailed fact-check by Coinpedia finds no credible evidence to support these allegations. The U.S. Department of Justice's review of the released documents found no substantiated proof that Israel hijacked control of the Bitcoin network. The claim regarding Israeli payroll for developers is unsupported by any documented evidence.
The investigation revealed a minor, indirect financial connection. Jeffrey Epstein donated approximately $850,000 to MIT between 2002 and 2017. In 2015, a portion of these funds, routed through MIT's Digital Currency Initiative (DCI), was used to pay salaries of Bitcoin Core developers like Gavin Andresen and Wladimir van der Laan. This funding occurred after the Bitcoin Foundation shut down, creating developer funding uncertainty.
The link to Israel primarily stems from former Prime Minister Ehud Barak, who stayed at Epstein's New York home multiple times between 2013 and 2017. Epstein reportedly acted as a backchannel for Israeli interests. Furthermore, prominent Israeli figures like designer Neri Oxman were senior researchers at the MIT Media Lab when it accepted Epstein's funds.
Regarding Blockstream, the company confirmed meeting Epstein in 2014 during its seed round via a fund linked to then-MIT Media Lab director Joi Ito. Epstein participated in an $18 million funding round, contributing $500,000. However, Blockstream CEO and cypherpunk Adam Back clarified that "Epstein’s stake was quickly sold and the company has no financial ties to him today." Back defended the company's actions, stating the introduction was part of a standard investor roadshow.
Allegations about Tether being used for price manipulation were deemed separate and unproven, with no evidence connecting them to network control or state manipulation.
The final verdict of the fact-check is that the claim of Israeli control over Bitcoin is false, remaining unverified and speculative.
