Jesse Powell, founder of the Kraken crypto exchange, has come under fire as federal officials look into claims of hacking and cyberstalking against a nonprofit arts group. According to sources who spoke to the New York Times, he established the organization and allegedly tampered with its computer accounts.
Jesse Powell stepped down as Kraken’s CEO in September while continuing as the board chairman.
Federal Investigation Targets Jesse Powell
The Federal Bureau of Investigation (FBI) executed a search warrant at the Los Angeles home of Kraken founder Jesse Powell in March. Reports note that it was a criminal investigation looking into hacking and cyberstalking allegations against the former CEO.
Powell was accused of meddling with the computer accounts of a nonprofit he had formed called Verge. An action that allegedly prevented access to crucial emails and other communications.
FBI and U.S. Attorney’s Office for the Northern District of California agents seized electronics from the executive’s house.
Notably, the prosecutors have not yet accused Powell of any crimes related to these allegations.
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A spokesperson for Kraken emphasized that the investigation targeting Powell was unrelated to the cryptocurrency exchange’s operations. According to the corporation, there is no reason to think prosecutors are looking into other potential problems.
Most recently, Jesse Powell filed a lawsuit against Verge, claiming that his removal from the organization was improper.
Previous Legal Challenges Faced by Kraken
While the current investigation does not appear to be directly linked to Kraken or its crypto-related activities, the exchange and Powell have faced legal troubles in the past.
Prosecutors examined allegations made in a 2019 wrongful termination lawsuit against Kraken, filed by a former employee. The lawsuit was ultimately settled in 2021.
Regulator fines have also been imposed on Kraken in the past. In November, it settled allegations of breaking Treasury Department sanctions against Iran by paying a $362,000 fine. Kraken also paid a $30 million penalty levied by the Securities and Exchange Commission (SEC) in February.
In July, a U.S. Magistrate Court issued an order compelling Kraken to provide the Internal Revenue Service (IRS) with the personal information of its users. The IRS has been probing potential underreported tax activities.
Dave Ripley Assumed CEO Role as Powell Stepped Down
In a leadership transition, Jesse Powell announced his decision to step down as Kraken’s chief executive in September of last year. However, he continued as chairman of the company’s board.
Dave Ripley, who had been serving as Kraken’s chief operating officer, took over as CEO in April this year.
Powell explained to Bloomberg that his decision came due to boredom as the company grew larger and less enjoyable. After leaving the CEO post, Powell declared he would support the crypto as an asset class.
The crypto industry is keeping a close eye on the Jesse Powell probe as it develops because it is concerned about what it might mean for the exchange.
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