- Kraken, Co-founder, and CEO, become the subject of a federal investigation on a non-crypto matter.
- Kraken announced in a press release that it is not included in the federal investigation.
- Jesse Powell sued Verge, a non-profit organization, last month.
Jesse Powell, the CEO, and Co-founder of Kraken, a crypto exchange platform, is under federal investigation. According to reports by the New York Times, where the incident was first announced, Jesse Powell is being investigated for allegedly hacking and cyberstalking a non-profit organization named Verge.
While federal prosecutors have not charged Jesse Powell, the investigation was focused on the allegations that the cryptocurrency exchange executive interfered with Verge accounts and prevented access to emails and other messages.
This led to a search of his home in Brentwood, where the FBI agents seized electronic devices.
The New York Times reported that Brandon Fox, Powell’s lawyer confirmed the investigations but stated that his client did nothing wrong. Brandon Fox also clarified that the investigations were unrelated to Jesse Powell’s employment or his conduct as an executive of the cryptocurrency exchange Kraken.
“A Kraken spokeswoman said the Verge investigation had nothing to do with the company and that Kraken had no reason to believe that prosecutors were investigating other potential issues.” New York Times reported.
Jesse Powell’s Relationship with Verge
According to Coindesk, Jesse Powell co-founded The Verge, a non-profit organization based in Sacramento, in 2007. In 2010, he worked as a Board member of Verge. However, Jesse Powell was removed from the board in 2022 for his frequent absence from meetings and for violating Verge’s guiding principles.
In June 2023, Jesse Powell instituted an action against The Verge in a Californian court where he claimed that he owns and has rights to access the email accounts of Verge, and he remains a Verge board member. In response, Verg’s lawyer claims otherwise.
Kraken’s History with the Feds
While the current federal investigation is not related to the cryptocurrency exchange, Kraken has faced legal scrutiny from the Feds before.
In 2019, allegations of wrongful termination sparked a lawsuit between Kraken, Jesse Powell, and a former Kraken employee. The former Kraken employee claimed the crypto exchange earned revenue from accounts in countries under U.S Sanctions. The former Kraken employee allegations were dismissed by the judge in 2021.
In February, Kraken had an incident with the United States Securities Exchange Commission where the crypto exchange platform was fined $30 billion for violating legal provisions.
“The Securities and Exchange Commission today charged Payward Ventures, Inc. and Payward Trading Ltd., both commonly known as Kraken, with failing to register the offer and sale of their crypto-asset staking-as-a-service program, whereby investors transfer crypto assets to Kraken for staking in exchange for advertised annual investment returns of as much as 21 percent.” said the press release by SEC.
In light of the current federal investigation into Jesse Powell, a Kraken spokesperson stated in a press release that;
“The US Attorney has advised us that Kraken is not a part of the investigation in any way, and the investigation does not concern Jesse’s affiliation with Kraken.”
In September 2022, Jesse Powell stepped down as the CEO of Kraken. Dave Ripley, the former COO, replaced him in March 2023.
