A federal judge skewered ‘Kraken’ lawyers for making ‘fantastical’ allegations of election fraud and failing to do the most basic due diligence

Sidney Powell in front of two US flags.
The GOP lawyer Sidney Powell.

  • A federal judge criticized “Kraken” lawyers including Sidney Powell and L. Lin Wood on Monday.
  • The remarks were at a hearing about whether they should face sanctions over their election lawsuits.
  • The judge suggested the lawyers had submitted affidavits in “bad faith,” calling them “fantastical.”
  • See more stories on Insider’s business page.

A federal judge on Monday excoriated a group of Republican-aligned lawyers including Sidney Powell and L. Lin Wood over their legal efforts to overturn the 2020 election results.

US District Judge Linda Parker made the comments at a contentious hearing on Zoom whose purpose was to determine whether the lawyers should face sanctions.

Parker repeatedly criticized the attorneys as failing to do “minimal” research on the “evidence” they presented as part of their multipronged effort – which Powell called the “Kraken” – to nullify the election results in states including Michigan, Georgia, Wisconsin, and Arizona.

“The court is concerned that these affidavits were submitted in bad faith,” Parker said.

After the so-called Kraken failed, Michigan and the city of Detroit filed complaints with the bar seeking punishment for Powell, Wood, and the lawyers who had signed on to their lawsuits, including Julia Haller, Howard Kleinhendler, Gregory Rohl, Brandon Johnson, Scott Hagerstrom, and Stefanie Lambert Junttila.

Wood sought to distance himself from the Kraken at the beginning of the hearing, saying he “played absolutely no role in the drafting of the complaint” in Michigan.

“I did not review any of the documents with respect to the complaint,” Wood said, later adding, “I just had no involvement in it whatsoever.”

But David Fink, an attorney representing Detroit, contested that claim, saying that Wood had endorsed the effort on social media and that Wood’s own lawyer had said he was associated with the case.

“He’s ready to tell people when it helps him that he’s involved in this case,” Fink said. He later accused the Kraken team of “claiming things that couldn’t have happened, either by law or fact,” and of “not vetting anything that they find.”

Parker also criticized the lawyers for filing affidavits without adequately investigating their claims.

“I don’t think I’ve ever really seen an affidavit” like this, Parker said after reading through one whose author speculated at length about whether the US Postal Service had tampered with mail ballots in the 2020 election.

“This is really fantastical,” Parker said. “How can any of you, as officers of the court, present this type of an affidavit?”

Haller responded that the affiant had submitted information he believed to be true.

“You think that by the language in the affidavit, Ms. Haller, that he is stating that he actually believes his conclusions to be true?” Parker pressed.

Shortly after, Powell spoke for the first time in the hearing, saying that they had filed a “massive” federal lawsuit alleging nationwide election fraud and that the only way to test those allegations was through the “crucible” of a trial.

The judge dismissed Powell’s statement, saying that “volume” “certainly doesn’t equate with legitimacy.”

Fink piled on. The Kraken team “made these allegations based on the paranoid delusions of some witness who never even gets to the punchline,” he said. If they don’t have evidence, they can’t make “miscellaneous, defamatory, and, frankly, phony” allegations, he added.

In his closing remarks, Fink accused the plaintiffs of having “played a very strange game of passing the buck” as it related to their role in the Kraken lawsuits.

He noted that Monday’s hearing came a little over six months after the deadly Capitol insurrection on January 6, adding that it “horrified most of us, maybe not all of us, on the screen,” at which point Wood interrupted and accused Fink of defamation.

The argument grew so heated that the court reporter interjected, noted that the hearing had been going on since 8:30 a.m. ET, and asked the lawyers to stop talking over each other so that she could accurately document the proceeding.

Parker reimposed order, and Fink accused the Kraken lawyers of using their licenses to “abuse the processes” of the court in a “devastating way.”

Fink also drew a direct line between the Kraken team’s efforts and the Capitol siege.

“Because of the lies spread in this courtroom, not only did people die on January 6, but many people throughout the world … came to doubt the strength of our democratic institutions in this country,” he said, adding that the court had a responsibility to sanction the Kraken lawyers.

“Because of the way that these lawyers have dishonored our profession, because of the way that these lawyers have taken advantage of this court and this courtroom,” the Kraken team should be referred to the bar for disciplinary proceedings, he said, adding that they should also be referred to the chief judge of the Eastern District of Michigan and prohibited from ever practicing law in the district.

Powell later said that she objected to “nearly everything” Fink said and that she’d never witnessed anything like his remarks in her years of being an attorney.

Parker then thanked Powell and the other lawyers for their remarks and wrapped the hearing, saying that though it was a long proceeding, “it has been a necessary day.”

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The CEO of Kraken says the crypto exchange is considering a traditional IPO following rival Coinbase’s volatile direct listing

Jesse Powell
Jesse Powell is the chief executive and co-founder of crypto exchange Kraken.

  • Kraken CEO Jesse Powell said he is considering an IPO when his company goes public instead of a direct listing, Fortune reported.
  • Powell’s thinking was influenced by Coinbase’s volatile direct listing in April.
  • The CEO ruled out going public via SPAC, saying his company is “too big” for it already.
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Kraken founder and CEO Jesse Powell said he is considering a traditional initial public offering to take the cryptocurrency exchange public instead of a direct listing following Coinbase’s volatile performance.

“An IPO is looking a little more attractive in light of the direct listing’s performance,” Powell told Fortune. “I would say we’re looking at it more seriously now having the benefit of seeing how the direct public offering played out for Coinbase.”

Coinbase, the largest cryptocurrency exchange in the US, went public on April 14 in what many viewed as a milestone from the digital asset ecosystem. The company was valued at $68 billion ahead of its direct listing but now hovers around a market cap of $58 billion.

Powell pinned the volatility of Coinbase’s performance to the method it used to go public, especially since existing shareholders are not prohibited from selling their shares at the debut in direct listings.

Unlike in an IPO, companies that go public via direct listing do not issue new shares.

Following a record for Kraken’s bitcoin trading volume in the first quarter of 2021, Powell had floated the idea of following Coinbase’s direct listing route.

The Kraken boss told Fortune that he is still optimistic his company can go public next year.

“Hopefully we’ll have more analyst coverage out, and there’s just more of a track record of growth for the industry that people feel like they can rely on,” he said.

While mulling over how best to take Kraken public, Powell said that a merger with a blank-check company was not an option.

“It might have been possible a few years ago, but today, I think we’re too big to consider doing a SPAC,” he said.

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Kraken crypto exchange CEO says a global regulatory crackdown could happen as adoption of digital coins grows

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The bitcoin price has soared in 2021

Kraken crypto exchange CEO Jesse Powell said a global regulatory crackdown on cryptocurrencies could happen, particularly as adoption becomes more widespread and governments step in to lay down rules for the market.

In an interview with CNBC on Monday, Powell said he did not think regulations will be clear-cut anytime soon and there was a risk that tough rules could come into place that might hobble use of cryptocurrencies. “I think there could be some crackdown,” he said.

Powell said he hoped the US and other large economies would not take too narrow a view on cryptocurrencies and succumb to the pressures of preserving the existing global financial system.

“Some other countries, China especially, are taking crypto very seriously and taking a very long-term view”, Powell said. China is planning to launch a digital yuan, while the Federal Reserve is still in the early stages of examining in the possibility of a digital dollar.

Many international regulators, governments and institutional investors are wary of cryptocurrencies. Their key features, such as anonymity and self-governance are a key part of the attraction for users, but there are also questions around security and the use of bitcoin to fund illegal activities, such as money laundering.

Stricter regulations might aim to combat this. The US is for example considering investor identity checks if trades break a certain threshold, but “something like that could really hurt crypto and kind of kill the original use case” Powell said.

South Korea has recently tightened regulations further to prevent illicit crypto-funded activities, while India is considering an outright ban on possession and trading of cryptocurrencies.

Bitcoin’s high levels of volatility have also contributed towards some skepticism. Since the start of the year, it has traded at levels ranging from around $30,000 to a new record high of around $63,000 on Tuesday.

In March, Federal Reserve Chairman Jerome Powell said high volatility was the key reason bitcoin and other cryptocurrencies could not replace the dollar. Various governments are however working on central bank digital currencies, which would work similarly to cryptocurrencies, but be regulated and overseen by central banks and national regulatory bodies.

Kraken’s Powell said he believed any kind of ban on using cryptocurrencies might be too late and only serve to increase interest in digital assets. “It would certainly send a message that the government sees this as a superior alternative to their own currency”, he said.

Last week, Securities and Exchange Commission commissioner Hester Pierce – whose nickname is “crypto mom” – said she saw no possibility for a governmental ban on bitcoin. She said even if it was forbidden, people would still carry on trading it.

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Coinbase rival Kraken could go public next year after a surge in bitcoin trading volumes

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Kraken co-founder and CEO, Jesse Powell.


Kraken is considering a stock market listing next year after the crypto exchange saw record bitcoin trading volume in the first quarter of 2021, CNBC reported on Thursday.

“We’re looking at being able to go public sometime next year,” Kraken CEO Jesse Powell told CNBC. “It would probably be a direct listing, similar to Coinbase.”

Kraken saw a massive boost from bitcoin hitting an all-time high of $61,725 in mid-March, Powell said, as a number of institutional investors piled into the space. He said any volatility is good for the company, but is even better when prices are going upwards.

Four times as many users signed up to Kraken in the first quarter than did in the second half of 2020, according to CNBC. Spot transaction volumes hit a record $160 billion in the same timeframe, or about 1.5 times higher than last year.

“The first quarter just completely blew away the entirety of last year,” Powell said, adding that the company beat last year’s numbers by the end of February and the whole market “really just exploded.” The total value of the cryptocurrency market exceeded $2 trillion this week after doubling in just two months.

Kraken is currently in talks with investors about another round of fundraising that could give it a valuation of $20 billion. The CEO said this is being delayed in order to evaluate how Coinbase’s IPO performs. But they aren’t in a rush to raise capital.

US rival Coinbase is set to go public on the Nasdaq next week at an expected valuation of $100 billion. The exchange reported preliminary revenues of about $1.8 billion for the first quarter and said it has 56 million verified users.

Companies that choose to go public via direct listings, like Spotify did in 2018, avoid paying hefty fees to investment banks that otherwise act as underwriters in a traditional IPO.

Instead, employees and investors convert their shares into stock that gets listed on a stock exchange. These can then be publicly purchased. Investors can then cash out without having to consider the lock-up period – the length of time after a traditional IPO during which shares cannot be sold by insiders.

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Ether is at a fork in the road and the cryptocurrency faces a key resistance level at $2,700, Kraken analysts say

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Ethereum’s cryptocurrency ether rose 35% in March, Kraken said.

Ethereum’s cryptocurrency ether is at a fork in the road and faces a big test in climbing above $2,700, according to analysts at crypto exchange Kraken.

Kraken analysts, led by Pete Humiston, said in a review of the market on Wednesday that ether had jumped 35% and outperformed bitcoin’s 30% gain in March.

Yet they said: “When looking at historical price action, ETH is at a bit of a fork in the road.” The world’s second-biggest cryptocurrency stood at around $1,990 on Thursday morning.

Kraken said on Wednesday that chart analysis suggested ether’s next big level of resistance is around $2,700. If it passes this level, it could break into a higher band where the next resistance level is $5,000, the report suggested.

Yet the analysts added that there is a danger ether falls below the key support level of around $1,460, in which case it could drop into a lower trading band where the lower support level is $990.

However, cryptocurrencies’ wild volatility means movements are hard to predict and makes technical analysis difficult.

Kraken’s report also said that the second quarter has historically been a good one for ether, which is yet to see a negative return in the period.

Ether has shot up more than 1,000% over the last year as interest in cryptocurrencies has boomed. It touched an all-time high of around $2,150 earlier in April and has traded around $2,000 over the last week.

Developers on the Ethereum network are set to make major changes to the system in July. The alterations will change how transactions work and start to destroy ether coins, which some analysts have said could lead to the price soaring.

Billionaire investor Mark Cuban told the Unchained podcast on Tuesday that he was bullish on ether and the Ethereum network, thanks to its many applications, including non-fungible tokens and smart contracts.

Yet cryptocurrencies continue to divide the financial world. Economist Nouriel Roubini on Tuesday reiterated his charge that bitcoin and other cryptocurrencies are too volatile and difficult to use to be currencies, on Bloomberg TV.

He questioned that there was any value in bitcoin and called it a “self-fulfilling bubble.”

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Bitcoin is not overbought and could reach $75,000 before the current bull market ends, research from Kraken says

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Citi said bitcoin is at a “tipping point.”

  • Bitcoin is not yet in “overbought” territory and could reach $75,000 before the current bull cycle ends, Kraken says. 
  • According to historical price movements of bitcoin, the first quarter of 2021 could be met with massive gains for the token. 
  • Bitcoin is up 62% year-to-date as of Friday as it hovers just below $48,000.
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Bitcoin could gain much higher before the current bull market ends based on historical price movements, says a Kraken Intelligence market report published Friday.

Although bitcoin is quickly approaching resistance, it remains several tens of thousands of dollars away from entering into “overbought” territory, Kraken said. If bitcoin were to surpass $75,000 in the next few months, historical price action suggests bitcoin would then be close to the top of the cycle. 

The cryptocurrency has pulled back from its all-time high above $58,000 on February 21, but it still finished the month 37% higher. The coin is up 62% year-to-date as of Friday as it hovers just below $48,000.

According to Kraken, bitcoin is now trending in a manner most similar to the first quarter of 2013, bitcoin’s best first quarter on record. If the trend continues, the first quarter of 2021 “could be a historic quarter with a relatively outsized return.”

“By plotting a logarithmic growth curve that connects BTC’s prior market cycle tops (resistance) and bottoms (support) and by making assumptions about how severe BTC will correct upon hitting a cycle high, one will find that BTC likely has plenty of upside before entering a bear market,” the report says. 

The report comes as some investors voice concerns that bitcoin’s rapid acceleration is a clear sign the cryptocurrency is in a bubble waiting to burst. Michael Burry said the coin is a “speculative bubble that poses more risk than opportunity” in a tweet Monday that has now been deleted. 

On Wednesday Kraken CEO Jesse Powell told Bloomberg a $1 million as a price target within the next 10 years is “very reasonable.” 

 

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Bitcoin will eventually be a global currency – and a $1 million price target within the next 10 years is ‘very reasonable,’ Kraken CEO says

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Bitcoin will eventually be the world’s currency, because “you have to think it’s going to infinity,” Jesse Powell, the CEO of the cryptocurrency exchange Kraken, told Bloomberg on Wednesday.

He said that national currencies were “already showing extreme signs of weakness” and that people would soon start measuring the price of things in bitcoin.

“The true believers will tell you it’s going all the way to the moon, to Mars, and eventually it’ll be the world’s currency,” Powell said.

Kraken, based in San Francisco, is in talks to raise new funding that would double its valuation to over $10 billion, Bloomberg reported in late February.

The price of bitcoin fell on Thursday by 0.4%, to $50,175, but is up 70% year-to-date. The price slipped earlier this week after Gary Gensler, the nominee to lead the Securities and Exchange Commission, said at his confirmation hearing that making sure crypto markets are free of fraud and manipulation was a challenge. Gensler has been viewed as an advocate for cryptocurrencies, given his previous work and teachings on the subject at MIT.

“In the near term, people see it surpassing gold as a store of value, so I think $1 million as a price target within the next 10 years is very reasonable,” Powell said of bitcoin.

Bitcoin believers expect it to replace fiat money, and the market capitalization of all national currencies combined could make up its worth, Powell said.

Read more: UBS: Buy these 14 back-to-normal stocks now before a ‘sharp acceleration’ in consumer spending in Q2 as vaccinations pick up

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A lawyer who filed Sidney Powell’s Michigan election lawsuit says he shouldn’t be disbarred and was just ‘holding the fort’ for her

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Sidney Powell, attorney for President Donald Trump, conducts a news conference at the Republican National Committee on lawsuits regarding the outcome of the 2020 presidential election on Thursday, November 19, 2020

  • Attorney Greg Rohl was instrumental in helping Sidney Powell file her Michigan election lawsuit.
  • Michigan’s governor and other elected officials are attempting to disbar Rohl as a result.
  • Rohl said despite filing the case, he did not make any changes, additions, or corrections to it.
  • Visit the Business section of Insider for more stories.

A local attorney who was instrumental in filing Sidney Powell’s Michigan lawsuit to throw out the state’s votes in the 2020 presidential election, said in a court filing he was just “holding the fort” for her and shouldn’t be sanctioned or disbarred.

Gregory Rohl, a trial attorney based in Novi, Michigan, wrote in a federal court affidavit that he was quarantined at home after having contracted COVID-19 when he was asked to assist Powell and attorney Lin Wood in filing the case. Rohl said in his affidavit he was approached at 6:30 p.m., and was told the filing deadline was at midnight.

Rohl’s filing comes just days after Michigan Gov. Gretchen Whitmer, state Attorney General Dana Nessel, and Michigan Secretary of State Jocelyn Benson filed complaints seeking to disbar Powell, Rohl, and several attorneys who were involved in the frivolous lawsuit.

Powell, a Texas-based attorney, was unable to file the suit herself at the time as she did not have a license to practice in Michigan. Rohl was told that Powell was waiting to hear back about her pro hac vice application, a request for permission to work on the case when a lawyer does not have the legal authority to practice law in the area.

Despite what Rohl was told, court filings do not show Powell ever actually filed a formal pro hac vice application.

In his affidavit, Rohl said the filing contained over 100 exhibits and took over an hour to review. He said he is not a political person and “did not really care who won” the presidential election, but added that he found the affidavits associated with the case “compelling” and called the complaint “sound” in his view.

The affidavits, however, had already been reviewed and summarily rejected in a separate case by the Great Lakes Justice Center on behalf of two Republican poll watchers. The judge said that “no basis exists” within the affidavits to stop the certification of Michigan’s electoral results.

Rohl filed the lawsuit at 11:56 p.m., less than five minutes before his deadline. He said he made no additions, deletions, or corrections to the complaint or affidavits.

Read more: Michigan Gov. Gretchen Whitmer filed a bar complaint against Sidney Powell, asking that she be stripped of her law license

Rohl argues he should not be disbarred as his involvement in the case became even more minuscule after District Judge Linda V. Parker waived the oral argument and held no evidentiary hearings. Once she dismissed the case, Rohl said he was told he was no longer needed as counsel.

Over 60 cases were filed across the US by Powell and other attorneys allied with the Trump administration in an attempt to challenge the election, but none of the lawsuits were successful in flipping the results of a single state, nor did they find any widespread evidence of fraud.

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