The U.S. Department of Justice and the Federal Bureau of Investigation (FBI) have formally closed their criminal investigation into Jesse Powell, the founder of the cryptocurrency exchange Kraken. After nearly two years under federal scrutiny, Powell faces no criminal charges, bringing a dramatic chapter to an end and restoring some measure of certainty to one of the industry's most recognizable figures.

Image Source: Jesse Powell

The Allegations

Tthe federal probe was never directly related to Powell’s involvement with Kraken or the operations of the cryptocurrency exchange. Instead, the investigation centered on the Verge Center for the Arts, a Sacramento-based nonprofit Powell co-founded in 2008. In early 2022, Powell’s Los Angeles home was raided by the FBI, with agents seizing dozens of laptops and mobile devices. The action followed accusations from members of Verge’s board that Powell had “hacked and cyber-stalked” the organization by allegedly locking out staff from emails and communication channels.

Court records and subsequent media reports reveal a story less criminal and more corporate: Powell, ousted from Verge’s board amidst internal turmoil, claims the nonprofit’s leadership orchestrated a “power grab,” quietly transferring domain access and communication tools before moving to remove him. Powell has asserted, both in court and in public statements, that he neither hacked nor stalked anyone at Verge.

Investigation Unrelated to Kraken’s Business

Significantly, officials repeatedly confirmed that the federal investigation was unrelated to Powell’s conduct at Kraken or any of the exchange’s business activities. Instead, the case focused exclusively on the nonprofit dispute, though its highly publicized nature cast a cloud over Powell’s reputation and, by extension, Kraken’s standing in the highly regulated crypto sector. While Powell managed the fallout, including filing a civil suit for defamation against Verge board members, Kraken as a company faced its own regulatory challenges. In the last two years, Kraken settled cases with both the U.S. Treasury and the Securities and Exchange Commission over sanctions violations and allegedly unregistered investment products.

Devices Returned, Reputation Battle Continues

Following this week’s formal closure, the FBI and DOJ returned all electronic devices seized from Powell’s home and a formal notice from prosecutors signifying the case's end due to lack of evidence. This letter, according to Fox, is an important tool to counter reputational damage and reassure Kraken’s banking partners and regulators that neither Powell nor his company is under further federal scrutiny. Powell, who contributed over $1 million in cryptocurrency to political causes during the 2024 election cycle, described the experience as “devastating both personally and professionally.” In court documents, he maintains that records from the returned devices validate his account and reveal how Verge insiders engineered his removal.

Looking Ahead

Although the criminal investigation is now history, the broader implications for governance in both nonprofit and crypto sectors remain. Powell is pressing ahead with his civil litigation against Verge, seeking damages and public vindication. Industry analysts suggest that with the investigation’s conclusion, Powell and Kraken can now focus on long-term strategic goals as well as navigating evolving regulatory requirements. For Kraken, the closure offers reassurance to investors and users, marking a critical step in rebuilding trust after an era defined by skepticism and enforcement actions.

Conclusion

The DOJ’s decision to drop its probe against Jesse Powell not only closes a legally fraught period for the individual at its center but also signals a turning point for one of crypto’s most influential brands. With the shadow lifted, Powell’s focus shifts from defending his reputation to leading Kraken’s next chapter—while the crypto world at large digests lessons in transparency, governance, and reputational resilience.