The United States Federal Bureau of Investigations (FBI) searched the residence of Jesse Powell, the co-founder of Kraken, in March. The investigation revolves around allegations that Powell hacked and cyber-stalked a nonprofit arts group, the Verge Center for the Arts, which he founded.
According to sources familiar with the matter, Powell allegedly interfered with computer accounts by blocking access to emails and messages from contributors. The FBI and the U.S. Attorney’s Office for the Northern District of California have investigated Powell since at least September 2022.
During the search, electronic devices were seized from Powell’s home in Brentwood, Los Angeles. However, it is essential to note that prosecutors have not formally charged Powell with any crimes. Powell’s lawyer, Brandon Fox, stated that the investigation primarily focused on allegations made by the nonprofit and did not relate to Powell’s involvement in the cryptocurrency industry. A spokesperson from Kraken reportedly confirmed this statement.
Jesse Powell, who founded the Sacramento-based arts group in 2007, has been associated with it as a founder and board member since April 2010, as indicated on his LinkedIn profile. Kraken, the cryptocurrency exchange co-founded by Powell, remains the second largest exchange in the United States, following Coinbase, according to CoinMarketCap.
In a separate incident, Kraken faced enforcement action by the U.S. Securities Exchange Commission in February for failing to register their staking service program’s offer and sale.
The company settled with the securities regulator, agreeing to pay a substantial $30 million fine.