Crypto proponents may see the role of JPMorgan Chase and Deutsche Bank as a win for digital currencies, if not the source of a little schadenfreude.
Following the arrest and subsequent suicide of disgraced financier Jeffrey Epstein, the nation remains riveted by the questions swirling around his business practices and social life filled with the bold-face names of the rich and the powerful. Among the most baffling questions: How, exactly, did he finance his deviant lifestyle for as long as he did?
Crypto has been a prized resource for traffickers of all sorts on the dark web since its inception. It can be tempting, then, to imagine that Epstein — who rolled $500 million in assets into a trust two days before his death — kept scores of crypto cold wallets full of Monero squirreled away somewhere in Central America. But the reality is more prosaic and more disheartening: Epstein didn’t have to rely on the anonymity of crypto, because at least two big, centralized banks enabled his lifestyle for years, including following his 2008 conviction on sex offense charges.
The biggest banks that served Epstein, JPMorgan Chase and Deutsche Bank, are now facing scrutiny over how he was allowed to continue financing sex-trafficking operations and other illegal activity for so long. The banks support for Epstein, it appears, was not made in ignorance, but a conscious policy decision based on all-available evidence. Damning evidence has surfaced showing compliance officers at both banks urging executives to sever ties with Epstein — advice that was summarily rejected, according to a report from the New York Times.
The investigation has centered largely around Deutsche Bank, which has a hard-earned reputation for shifty high-profile dealings. The institution finally cut ties with Epstein in 2013, due to “reputational concerns.” However, Deutsche Bank’s antiquated banking system led the bank to mistakenly believe it had shut down all of Epstein’s accounts with the institution, when at least one was left active.
Epstein’s close relationships with major banks do not preclude his use of crypto, of course. Though it’s unclear if Epstein ever held digital currencies — he never publicly disclosed any holdings — he was reportedly an early proponent of crypto, touting its function as a store of value. If Epstein did hold some crypto, it may further complicate the task of collecting damages for Epstein’s victims. (Past scandals have proved the difficulty of recuperating digital assets following the custodian’s death.) According to the criminal forfeiture statute, the government has the right to seize any of Epstein’s assets connected to a crime.
Regardless of how Epstein distributed his wealth, the role of big banks highlights the way centralized financial institutions often prize the business of high-net-worth clients over the interests of everyday people. For crypto proponents, this can only strengthen the rationale for the adoption of decentralized vehicles for financial freedom and empowerment.