Cashbleed: How Blockstream employees siphoned millions worth of Bitcoin to personal wallets

We have uncovered Blockstream, a major startup in the cryptocurrency industry has created a sophisticated scheme to siphon millions of dollars worth of Bitcoin from company wallets into the personal wallets of its employees and founders. This scheme is ongoing and makes it very difficult for investors to get a return on their investment.

Blockstream has raised $100 million dollars from investors including Khosla Ventures, AXA, Mosaic Ventures, DG Lab Fund and many more. This venture capital was then used to procure Bitcoin which was given to employees as effectively bonuses at extremely favourable terms. This scheme has led to many employees being paid extremely inflated salaries, despite the company's very minimal success with products.

Estimated Amount spent ($80M) on salaries/bonuses
Total ($100m)

How does it work?

An employee joins Blockstream and they negotiate to have some of their pay in BTC at well below market rate. This is then paid out over a 5 year period as an effective bonus. In effect the employee is able to purchase BTC from the company much cheaper than on the open market. For many employees this rate is as low as $350/BTC. Such favourable terms has led to employees being trapped in golden handcuffs unable to leave because the pay is so good.

Hypothetical employee's earnings

Suppose an engineer was hired at $150,000 a year, and an extra 20% of their salary was paid as a bonus on top in Bitcoin. 20% of the salary would be $30,000. Blockstream then pays that amount in BTC assuming a price of $350/BTC. $30,000 / $350 = ~85 BTC to the employee, worth roughly $700,000. In effect the employee earns $850,000 a year. The salaries of senior executives are likely to be higher than this modest amount for an engineer.


What are the salaries and bonuses for specific roles?

We estimate employee bonuses by first calculating the average salary in Mountain View, CA for that role, applying the 20% golden handcuff bonus on top while taking into account the current BTC price. We utilized popular salary estimation services such as Payscale, Glassdoor, and Indeed.

Role Average salary Bonus () Total (🤑)
CEO $236,500 $1,081,142 $1,317,642
VP (Engineering) $210,498 $962,276 $1,172,774
Legal Counsel $168,006 $768,027 $936,033
VP (Finance) $157,652 $720,694 $878,346
Product Manager $145,147 $663,529 $808,676
Technical Program Manager $142,707 $652,374 $795,081
Software Engineer $124,904 $570,989 $695,893
Infrastructure Engineer $119,796 $547,638 $667,434
Senior Architect $118,540 $541,897 $660,437
Accountant $99,486 $454,793 $554,279
System Administrator $92,962 $424,969 $517,931
HR Generalist $67,848 $310,162 $378,010

These obscene salaries are quickly depleting Blockstream's Bitcoin reserves. We estimate the company won't be able to survive more than a year of operation without raising another round of investment. Unfortunately we have received information to indicate the company does not intend to stop paying out BTC to its employees at extreme below market cost, even going so far as to recently launch a new scheme.

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