FBI Closes Case Against Kraken Founder Over Nonprofit Dispute

Highlights:

• The FBI closes case aganist Kraken founder Jesse Powell.
• The seized devices from Powell’s home have been returned.
• The investigation was not related to Kraken’s crypto operations.

The Department of Justice has concluded its two-year investigation involving Kraken founder Jesse Powell. The investigation was started by the FBI upon allegations of misconduct that emerged in early 2022. None of these charges concerned cryptocurrency or Kraken operations but were related to a conflict with a nonprofit. The Fortune report indicates the police targeted Verge Center for the Arts, a facility Powell co-founded in 2007. The nonprofit alleged Powell engaged in hacking and cyberstalking the organization’s board of directors and that Powell restricted access to organizational accounts such as Slack and email.

💥BREAKING

FBI DROPS INVESTIGATION INTO KRAKEN FOUNDER

NO CHARGES FILED. CASE OFFICIALLY CLOSED. pic.twitter.com/pGzV89HDzR

— DustyBC Crypto (@TheDustyBC) July 22, 2025

Raid on Powell’s Home and Legal Developments

In 2023, the FBI searched Powell’s house in Los Angeles. The search led to the seizure of several laptops and phones by agents. This raid came after Verge accused Powell of interfering with their communications in the nonprofit. Investigators had proceeded on complaints of fraudulent access to accounts.

In the court filings, Powell rejected these allegations. He accused Verge board representatives of trying to oust him without formal notice. He further added that they had swapped on the domains as well as access to accounts without his knowledge. Powell said the FBI took machines that held messages proving his side of the story. Later in 2024, Powell filed a civil lawsuit against Verge board members. He alleged that they were defaming him and denying him some important documents. His lawyers disclosed that the Department of Justice had sent a declination letter to confirm the closure of the case.

Kraken Founder Cleared of Wrongdoing

The Justice Department has now restored all electronics to Powell. This affirms the end of the criminal investigation. The case had nothing to do with the Kraken exchange and its services. Throughout the investigation, authorities never filed any charges. The DOJ’s decision to drop the case follows internal reviews of the evidence, including documentation reportedly found on Powell’s devices that supports his defense.

The Kraken founder has kept up the legal battle to clear his name. According to his lawyers, the behavior of legal counsel of Verge in the discovery was inappropriate. These legal moves aim to prove further that Powell acted within his rights as a nonprofit founder.

Kraken’s Business Operations Remain Active

Kraken persisted with development of its services even in the face of legal dispute. The exchange recently introduced xStocks trading with round-the-clock access to global users. Kraken is targeting an IPO as the regulatory situation continues to become transparent.

BREAKING: Wall Street is officially onchain.
xStocks are now live on Kraken ❎

60 U.S. equities tokenized and tradable 24/5. More coming soon.

We’re not waiting for the future. We’re building it.👇https://t.co/iKu44ZiwZN

Not available in the U.S. or to U.S. persons. Geo… pic.twitter.com/FjOsxDJ9se

— Kraken (@krakenfx) June 30, 2025

The company has in recent years been settling with the regulatory authorities. In 2023, U.S. authorities fined Kraken $360,000 for breaking sanctions. Early in 2024, the SEC imposed a $30 million fine on the firm on account of the unregistered offer and sale of crypto asset staking. Such activities were, however, not related to the nonprofit case of Powell.