‘Some Bad Shit’: Emails Show Epstein Pushed Bannon on Bitcoin Taxes and Warned on Libra

Jeffrey Epstein wasn’t just watching crypto’s rise—he was trying to shape how Washington would tax and police it. Newly released correspondence shows that in 2018 he leaned on Steve Bannon to probe the federal government’s crypto stance, reflecting how early Beltway conversations framed Bitcoin as a tax and national security issue rather than a technology to nurture.

In February 2018, Epstein emailed Bannon: “Will [T]reasury respond to you re: crypto or do we need another way in for advice.” Bannon replied the matter sat with the “NSC,” indicating the National Security Council—not Treasury—was actively weighing crypto. Epstein shot back: “Understood. But there is an office of terrorism finance at [T]reasury that has thought about tax.” He then urged a policy idea that was blunt and revealing: a Treasury-run voluntary disclosure form for realized crypto gains to “fuck all the bad guys.”

That fixation on tax surfaced again when he floated a simple example: buying furniture on Overstock with Bitcoin—then the first major retailer to accept BTC—and triggering a taxable gain upon spending the coins. In another note, he called “our cr[y]pto coin issues” U.S.-based and “predominantly” about tax, regulation, and disclosure, adding that globally it was “a whole different bag,” and: “Some bad shit. Very bad.” Who “our” covered beyond himself is unclear. Separate emails released last month indicated he was the subject of a federal money laundering probe. Years earlier, he had been a convicted sex offender; he died in a Manhattan jail cell while awaiting trial on sex trafficking charges.

What stands out is the playbook: insert influence at the policy layer, fold crypto into existing tax/terror-finance frameworks, and normalize reporting via self-declaration. That framing often predetermines market structure. Once you classify blockchains as tax exposure plus national security risk, you push compliance architecture before utility. It chills experimentation and advantages intermediaries who can absorb the overhead, while signaling to regulators that evasion—not innovation—is the core feature set to police.

The paper trail is extensive. In more than 20,000 emails and texts released by Congress on Wednesday, crypto appears repeatedly—and the through line is Epstein’s desire to see regulations pushed through the first Trump administration. In September 2018 he wrote an associate that “crypto needs to be thought of [as] similar to the internet,” requiring international agreements and “coordinated understandings.” Otherwise, he said, it is “a Ponzi scheme outside of the law.” That’s the language of jurisdictional harmonization and surveillance portability, not open networks.

His skepticism extended to stablecoins. In June 2019—less than two weeks before his arrest—he railed against Libra, Facebook’s failed stablecoin effort: “Libra is not a currency!! It is money… not the same,” insisting the project “could take down [the] financial system” if placed in the “wrong hands.” He added: “That’s the reason I didn’t pursue.” It remains unclear whether he meant Libra specifically or stablecoins more broadly. No response was received from David Marcus regarding whether the project ever sought or received interest from Epstein.

Epstein appears to have engaged the industry as well as Washington. Before March 2015, he met at his Manhattan townhouse with Brock Pierce, co-founder of Tether, according to emails released this week. By April 2018, he was texting: “Interesting crypto, everyone wants in. So amusing.”

If you strip away the spectacle, the pattern is familiar: powerful actors try to fix the narrative around tax, AML, and national security early, then nudge policy to make voluntary disclosure a bridge to mandatory reporting. Technologically, that biases the stack toward traceability tools and regulated on-ramps. Psychologically, it recasts early adopters as latent tax risks needing confession. Commercially, it favors incumbents who sell compliance as a service. Ethically, it risks collapsing legitimate privacy into suspicion by default.

Epstein’s emails don’t define crypto policy, but they capture a moment when Washington’s priors hardened—and they show how quickly crypto was treated as a tax problem to be contained rather than an innovation to be understood.