FBI Reportedly Raid Kraken Founder Jesse Powell's House Over Cyberstalking Accusations

FBI Reportedly Raid Kraken Founder Jesse Powell’s House Over Cyberstalking Accusations

UTC by Chimamanda U. Martha · 3 min read
FBI Reportedly Raid Kraken Founder Jesse Powell’s House Over Cyberstalking Accusations
Photo: Depositphotos

The Kraken founder is not the first public figure in the crypto industry to be investigated by federal authorities.

Jesse Powell, the controversial founder and former CEO of Kraken, one of the leading cryptocurrency exchanges, has recently found himself at the center of an investigation by the Federal Bureau of Investigation (FBI). According to a New York Times report citing people familiar with the matter, the FBI raided Powell’s residential home in Brentwood earlier in March following allegations of cyberstalking made against him by a non-profit organization (NGO) called Verge Center for the Arts.

The raid stemmed from claims made by the NGO, which accused Powell of unauthorized access to its computer systems and impeding its communication channels by blocking access to emails and other essential messages. In conjunction with the US attorney’s office for the Northern District of California, the FBI has been actively investigating the case for several months.

The former Kraken CEO, who remained on the company’s board after stepping down in September last year, was also part of the founders of the NGO Art Center. However, he was ousted from the board of directors of the foundation following the expression of his controversial views. In response to his dismissal, Powell initiated a lawsuit against the arts center, claiming that his removal was unjustifiable.

US Authorities Confiscate Powell’s Electronics during the Raid

During the search at Powell’s residence in the affluent Brentwood neighborhood of Los Angeles, FBI agents seized electronic devices belonging to the Kraken founder, people familiar with the matter told the New York Times. However, it is important to note that no formal charges have been filed against Powell concerning the cyberstalking claims.

Brandon Fox, the attorney representing Powell, acknowledged that his client is indeed the subject of an investigation by federal prosecutors in Northern California. However, Fox stressed that the probe solely revolves around the allegations made by Verge Center for the Arts and is entirely unrelated to Powell’s professional endeavors and conduct within the crypto industry.

The lawyer firmly asserted that Powell did not participate in any wrongdoing. He further noted that the art center provided one-sided information to the bureau, claiming that the authorities would have found him not guilty if presented with the complete story.

“We have reason to believe Verge provided a one-sided account that did not provide the government with the full picture, which would have shown that he did nothing wrong,” Fox said.

The Kraken founder is not the first public figure in the crypto industry to be investigated by federal authorities. A few months ago, the FBI searched the Potomac, Maryland, residence of Ryan Salame in April. Salame, who previously held the position of Chief Executive Officer at FTX’s Bahamian subsidiary, was scrutinized for the catastrophic collapse of the $32 billion-valued exchange, FTX. While details regarding the raid were not disclosed, it was speculated that the investigation may be linked to Salame’s potential involvement in the exchange’s downfall.

FBI’s Investigation Has No Connection to Kraken

A Kraken spokesperson responded to the news, emphasizing that the Verge investigation has no connection to the operations or activities of the company. He further reiterated that there is no reason to believe that prosecutors are investigating any other potential issues beyond the scope of the Verge case.

While the most recent investigation has no possible connection to Kraken, the crypto exchange and Powell have faced legal scrutiny in the past. Recently, prosecutors have examined allegations raised in a wrongful termination lawsuit against Kraken in 2019. The lawsuit accused the company of generating revenue from accounts in countries under US sanctions. The suit alleged that Kraken’s bank accounts were missing millions of dollars in customer deposits.

Blockchain News, Cryptocurrency News, News
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