Kraken Chairman and co-founder Jesse Powell speaks with Fox News Digital about why he filed a lawsuit against a co-op board in a prominent Democrat building for discrimination against his offer to buy one of 12 units.
A San Francisco apartment co-op used to house ritzy Democrat campaign parties and its megadonors has found itself as the defendant in a new discrimination lawsuit filed by a cryptocurrency pioneer.
Jesse Powell, the co-founder of crypto exchange Kraken, is suing the 2500 Steiner Street shareholder corporation over alleged discriminatory actions against his financial, criminal and potential political affiliations that led to the denial of his purchase of California Lt. Gov. Eleni Kounalakis’ unit.
“I’m just frankly exhausted at dealing with this, exhausted from being discriminated against,” Powell told Fox News Digital on Friday. “And San Francisco should not be the place where that happens. In fact, San Francisco needs the crypto industry more than ever right now.”
“I think that the hypocrisy of the so-called progressive movement that somehow can’t tolerate ideas that disagree with their own, meanwhile claiming to be open to everything,” he added. “It’s just bizarre to me.”
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Powell filed the lawsuit last Wednesday – claiming he “tried everything to avoid” it – where it’s alleged that he and the unit seller inked a nearly $15.5 million deal for the sale of the unit in September and entered escrow before the co-op board learned of his identity and their “demeanor changed.”
Kraken Chairman and co-founder Jesse Powell tells Fox News Digital that he’s “exhausted” after alleged housing discrimination and “the hypocrisy of the so-called progressive movement.” (Getty Images)
Powell holds protected status under California’s Fair Employment Housing Act (FEHA) and the Unruh Act, due to his source of income and criminal history. FBI agents had searched Powell’s Los Angeles home in July 2023 over hacking and cyberstalking allegations, but he was never charged with any crime in connection to the search and seizure.
“The final attempt that I made was to send each shareholder a personal letter explaining why I think I would be a good neighbor, asking to have a conversation with them. And the response we got back from that was, ‘We consider the matter to be closed,’ from their attorney,” Powell explained. “And so that, to me, was the end of the road of trying to resolve this amicably. And I had no other choice but to file a lawsuit at that point.”
In a co-op building, buyers invest in shares of a housing cooperative as opposed to owning a property. When Powell’s offer reached the shareholders for final approval, the lawsuit says the board “schemed to discriminate against Mr. Powell by refusing to approve the sale,” and “the Corporation never gave Mr. Powell a straight answer for its denial, instead offering only obfuscation and shifting pretexts for hindering.”
This specific 12-unit property is colloquially known as “Susie’s Building,” named after businesswoman and longtime Democratic donor Susie Tompkins Buell.
“Whether our political differences might have sort of tinged their opinion or willingness to have an open mind about those things, maybe. But, the building is packed with Democrats,” Powell noted. “It’s obviously known for [and] has a reputation of being this sort of mecca of Democratic Party fundraisers where the who’s who of the party go floor to floor collecting checks.”
“I’m not a Democrat, but I’m not a Republican either. I vote the issues. I consider each candidate independently. I look at the public policy implications of things. And so, I just happen to be, I think, more aligned with sort of right-coded causes over the last four years as the Biden administration had attacked our industry,” the Kraken co-founder continued.
When going through the shareholder approval process, Powell understood that an agreement between him and the sellers was not the end of the purchase. Bylaws required the sale to be submitted to the building’s non-selling shareholders.
Powell’s application was initially denied in October, when no reason was reportedly listed for the denial. Upon pressing for an answer, the building’s property manager claimed there were “a number of concerns” deemed “unresolvable.”
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Days later, the lawsuit alleges, the 2500 Steiner Street board told Powell that the denial was a matter of finances, which his attorneys argued were “far from ‘unresolvable.’” He provided necessary documentation, and requested a meeting with the board as typical in co-op transactions, but “no such meeting happened” before the shareholders delivered their final decision in November.
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“The shareholders knew who the seller was all along. They received the entire package of materials, including the transfer agreement… They knowingly, to the lieutenant governor of California, were willing to block her from selling her unit that she’s been trying to sell, from my understanding, for over a year, quietly and off the market,” Powell said.
“Obviously, she didn’t want coverage of this. And they sort of forced her into a position of now being in the media about this transaction. And so, you have to wonder if there’s some bad blood there – why is she getting out of the building? If she’s leaving San Francisco, why is she leaving San Francisco? That’s probably a larger question.”
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Representatives for the 2500 Steiner Street corporation did not return Fox News Digital’s request for comment.
Lt. Gov. Kounalakis’ office also did not respond to Fox Digital’s request for comment.
Though Powell has no formal attachment to the Democrat or Republican Parties, he did donate $1 million to President Donald Trump’s campaign in June and has recently “supported nationally popular conservative causes,” the lawsuit says. He co-founded Kraken in 2011 and stepped down as CEO in April 2023, but remains as chairman and a large shareholder.
He argues that preventing this real estate deal is “very bad for San Francisco,” perpetuating a city housing supply shortage, keeping millions of dollars from entering the local economy and hindering other successful entrepreneurs from moving there.
“This has far-reaching implications. It’s not just about this one unit in the city preventing somebody from moving from one city to another city… I think we need to look at the rules around co-ops, and maybe we need some new law that says you can’t discriminate against anybody for any reason other than financial qualifications when it comes to housing. No matter how much you like them, no matter how much you don’t like them, no matter whether you think they’re going to be a good neighbor or not. If they’re financially qualified, you got to let them in.”
When asked why he has no desire to find another property, Powell replied that 2500 Steiner Street’s “amazing” views of the Golden Gate Bridge, Alcatraz Island and its location convinced him to move back to San Francisco after leaving for Los Angeles in 2018.
“I guess I just sort of became emotionally attached to it. And me going to another unit doesn’t really solve the housing problem. It’s still one less unit that’s on the market,” he said. “I’m happy to live in a neighborhood with people with different ideas, happy to live in a building with people with different ideas… I take care of my neighbors and I want to make San Francisco a better place. And I don’t think ruffling a few feathers, people being uncomfortable, people not wanting to see me as they pass me in the lobby… is a reason to block somebody from having an apartment. I think it’s extremely selfish.”
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The Kraken co-founder isn’t interested in playing a part in the California exodus either, though people have suggested he move to places like Austin, Texas, or Miami, Florida. He stood firm in that he hopes to “make a difference” in his longtime home state “rather than flee.”
A court date has been set for July 9 in California’s superior court to hear opening arguments of the case. Powell and his attorneys are asking the judge to move the unit sale forward and award declaratory relief for compensatory damages, punitive damages and legal fees and costs.
“We may get to some sort of settlement before that happens. If this ultimately goes to trial, a jury will have to decide on whether there was unlawful discrimination or not,” Powell said. “There are a few avenues we can discuss in settlement if they’re interested in settlement. But, I’m really focused on just being able to move into that unit. And that’s really the most satisfying outcome to me.”
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“San Francisco’s obviously welcoming of a wide variety of people from all walks of life who have very different ideas about how to live and what their identities are. In fact, San Francisco is a sanctuary city… And so you would think that the people that live in this building, who were largely Democrats and donate to these causes of diversity and inclusion, would be open to somebody with a diverse job or a diverse opinion about politics or even cryptocurrency. As you know, the cryptocurrency industry has faced significant debanking. And so we are used to being discriminated against on the basis of our industry and the work that we do. And it feels like this is yet another example of being discriminated against on the basis of the work that I do.”
“I think the city has a lot of work to do to bring back businesses, to revitalize downtown. And it’s not going to get very far if people like me continue to be discriminated against when they’re looking for housing to return to San Francisco,” he concluded.
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