The United States Federal Bureau of Investigations (FBI) reportedly searched the home of Jesse Powell, co-founder of Kraken, a prominent cryptocurrency exchange. The search, which took place in March, was part of an ongoing investigation into allegations that Powell hacked and cyber-stalked a nonprofit arts group. The New York Times recently revealed that the FBI and the U.S. Attorney’s Office for the Northern District of California had been investigating Powell since at least September.
According to sources familiar with the matter, Powell allegedly interfered with computer accounts associated with the Verge Center for the Arts, a nonprofit organization he founded. It is claimed that he blocked access to emails and other messages from contributors to the arts group. The FBI seized electronic devices from Powell’s home in Brentwood, Los Angeles during the search. However, it is important to note that prosecutors have not yet charged Powell with any crimes.
Powell’s lawyer, Brandon Fox, emphasized that the investigation primarily revolves around allegations made by the Verge Center for the Arts and is unrelated to Powell’s involvement in the cryptocurrency arena. This statement was also confirmed by a spokesperson for Kraken, highlighting that the investigation does not touch upon the operations of the renowned cryptocurrency exchange.
Jesse Powell, who founded the Sacramento-based arts group in 2007, has been a key figure in the cryptocurrency industry. His role as co-founder and board member of Kraken has significantly contributed to the exchange’s growth. Despite the ongoing investigation, Powell’s lawyer maintains that his client “did nothing wrong.”
The seizure of Powell’s home by the FBI marks another instance of law enforcement cracking down on cryptocurrency-related activities. Kraken itself faced enforcement action by the U.S. Securities Exchange Commission earlier this year, resulting in a $30 million fine. The SEC accused the exchange of failing to register the offer and sale of their staking service program. This incident raised concerns about compliance within the cryptocurrency industry and highlighted the need for stricter regulations.
While the investigation into Powell’s alleged hacking and cyber-stalking activities unfolds, Kraken continues to operate as one of the largest cryptocurrency exchanges in the United States. It remains in the second position, behind Coinbase, according to CoinMarketCap.
As this story continues to develop, it raises questions about the intersection between technology, law enforcement, and the evolving landscape of digital assets. It serves as a reminder that even prominent figures in the cryptocurrency industry are not exempt from scrutiny and investigations by regulatory bodies. The outcome of the investigation into Powell’s actions will undoubtedly have implications for both Kraken and the broader cryptocurrency community, shaping the future of the industry in unforeseen ways.
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