The co-founder of Kraken had his home raided by FBI teams as part of a case involving computer hacking. In question, an investigation pushed by an artistic center, founded by Jesse Powell himself, who accuses him of having spied on the confidential documents of the organization. What is Kraken’s place in this case?
Investigation opened on the president of Kraken
Last March, the Federal Bureau of Investigation (FBI) raided the home of the co-founder and current president of the Kraken cryptocurrency exchange. This intervention took place within the framework of an investigation accusing Jesse Powell of hacking against the nonprofit Verge Center for the Arts.
Founded in California by Jesse Powell himself in 2007, its members do not have a good relationship with the founder. So, last year, Kraken’s co-founder was ousted from the board from the arts center for violating the organization’s “main guidelines”.
As a result, J. Powell decided to restrict the center’s access to its emails, website and internal messaging system. According to the lawyer for the arts centre, he would also have accessed confidential information of the organization without having the authorization.
On the FBI side, the investigation has been ongoing since the fall of 2022. During the search of his accommodation, several electronic devices were seized. However, for now, the situation seems to be in Jesse Powell’s favor: prosecutors have not charged him with any crime.
Users of the Kraken platform have little to worry about: an exchange spokesperson says the case has no connection with the company or its activities. At the same time, Jesse Powell’s lawyer confirms that an investigation has been launched by Northern California prosecutors, while denigrating any involvement with his client’s professional activity.
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Kraken and American regulation
Although the FBI does not appear to be investigating the activities of the Kraken Corporation, the Securities and Exchange Commission (SEC) has already tackled the cryptocurrency exchange in the past.
Just this year, while Binance and Coinbase were accused of offering unauthorized trading in securities, the company co-founded by Jesse Powell was forced to pay a fine of up to 30 million dollars.
The reason ? According to the American institution, Kraken did not respect the laws in force by offering the sale of unregistered securities through its staking program. As a result, the exchange was forced to close this feature to its US customers.
Moreover, in 2022, the American Treasury condemned the company to a fine of 360,000 dollars for evading U.S. international economic sanctions. In addition, the exchange was accused of leaving its services open to citizens from Iran.
Whether it’s Kraken, Binance, Coinbase or other companies in the cryptocurrency industry, many are aware of the risks associated with regulating their field of activity. Despite the opportunities offered by the sector, the lack of legislation and the arbitrary decisions of the SEC are decried for stifling innovation in this growing new industry.
👉 Learn more about the dispute between the SEC and the cryptocurrency industry
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