FBI Closes Kraken Founder Probe—Jesse Powell Cleared as Seized Devices Returned

Feds fold: Kraken's Jesse Powell walks free after FBI drops investigation—hardware returned without charges.

No handcuffs, just handbacks

The crypto world can exhale—for now. After months of speculation, the FBI quietly returned Jesse Powell's devices and closed its probe into the Kraken co-founder. No explanation, no apologies—just another case of regulatory theater ending with a whimper.

Silicon Valley wins again

While Powell's lawyers undoubtedly earned their retainers, the real story here is the feds' continued pattern of crypto intimidation tactics collapsing under scrutiny. Maybe next time they'll spend those taxpayer dollars auditing a bank instead.

Justice Department drops the case

Documents Powell filed this week include a so-called declination letter from prosecutors, confirming the Justice Department has walked away from the case.

His attorney said he requested the letter to counter the reputational damage caused by the raid and to reassure banks and regulators that Kraken’s leadership is not under federal scrutiny. 

Powell called the search “devastating” personally and professionally, maintaining that discovery in his lawsuit has already shown the accusations to be baseless.

The government’s exit does not resolve lingering questions. Neither the Justice Department nor the FBI WOULD comment on how the Times obtained details of the investigation.

Powell’s latest filings also accuse two Verge board members, one of them attorney Phil Cunningham, of withholding key documents during discovery. 

Verge, meanwhile, continues to operate as a fixture of Sacramento’s arts scene, supported over the years by more than $1 million in donations and extensive tech assistance from Powell. 

Notably, Powell declined to say whether the returned devices held Bitcoin or other digital assets. When agents seized the hardware, Bitcoin () traded near $23,000. As of press time, BTC trades near $119,000.