The United States Federal Bureau of Investigations (FBI) searched the home belonging to Jesse Powell, co-founder of cryptocurrency exchange Kraken, in March. The search was part of an investigation into allegations that Powell had hacked and cyber-stalked a nonprofit arts group.
The FBI raided Powell’s home in March
According to sources familiar with the matter, Powell is accused by the FBI of interfering with computer accounts associated with Verge Center for the Arts, a nonprofit organization that he founded. The allegations state that Powell blocked access to emails and other messages from contributors to the arts group. The FBI, in conjunction with the U.S. Attorney’s Office for the Northern District of California, has been investigating Powell since at least September.
During the FBI search, electronic devices were reportedly seized from Powell’s home located in Brentwood, Los Angeles. However, it is important to note that prosecutors have not formally charged Powell with any crimes. Powell’s lawyer, Brandon Fox, clarified that the focus of the investigation primarily revolved around the allegations made by Verge Center for the Arts, rather than Powell’s involvement in the cryptocurrency industry. This statement was reportedly confirmed by a spokesperson from Kraken. Fox further emphasized that Powell maintains his innocence and asserts that he “did nothing wrong.”
Jesse Powell is known for his role as the co-founder of Kraken, the second-largest cryptocurrency exchange in the United States after Coinbase, as per data from CoinMarketCap. Powell has been involved with the Sacramento-based arts group since its founding in 2007, although his LinkedIn profile indicates that he has served as the founder and board member since April 2010.
Kraken continues to face regulatory scrutiny from the SEC
It is worth mentioning that Kraken itself faced regulatory action earlier this year. In February, the U.S. Securities Exchange Commission (SEC) took enforcement measures against the exchange for its failure to register the offer and sale of its staking service program. As a result, Kraken settled with the SEC, agreeing to pay a substantial $30 million fine.
While the investigation into Jesse Powell’s alleged hacking and cyber-stalking activities continues, it is important to await further developments and the outcome of the probe. Kraken, as a prominent player in the cryptocurrency industry, will likely be monitoring the situation closely, particularly as it strives to maintain its position within the competitive landscape of digital asset exchanges.
As the case unfolds, it serves as a reminder of the potential legal and reputational risks that individuals and organizations operating in the cryptocurrency space may encounter. Regulatory compliance and adherence to ethical standards remain critical for both industry participants and the broader community as the cryptocurrency ecosystem continues to evolve.
