DOJ Drops Criminal Probe Into Kraken Founder Jesse Powell: What Really Happened?
- Why Did the DOJ Investigate Jesse Powell?
- How Did Powell Defend Himself?
- What’s Kraken’s Regulatory History?
- FAQ: Key Questions Answered
The U.S. Department of Justice (DOJ) has closed its criminal investigation into Jesse Powell, founder of cryptocurrency exchange Kraken, over allegations tied to his dispute with the Verge Center for the Arts. The FBI raided Powell’s Los Angeles home in 2022, seizing electronics, but the case was quietly dropped in 2024. Powell maintains his innocence, claiming Verge’s board conspired against him. Meanwhile, Kraken continues facing regulatory scrutiny, including a $30M SEC fine. Here’s the full story.
Why Did the DOJ Investigate Jesse Powell?
The FBI launched an investigation in 2021 after Verge Center for the Arts—a nonprofit Powell co-founded in 2007—accused him of hacking their digital accounts and blocking access to emails and Slack channels. In March 2022, agents raided Powell’s Brentwood home, confiscating laptops and devices. However, by 2024, the DOJ sent a "declination letter" confirming the case was closed without charges. Powell’s lawyer, Brandon Fox, argued the allegations were baseless and unrelated to Kraken or crypto.
How Did Powell Defend Himself?
Powell filed a defamation lawsuit in 2024, alleging Verge’s board staged a "hostile takeover" and fabricated evidence. Internal messages from seized devices reportedly support his claims. "I never hacked or stalked anyone," Powell stated in court filings. He also accused Verge’s legal counsel, Phil Cunningham, of withholding exonerating documents. The NYT reported that Powell’s reputation suffered significantly due to the publicized raid.
What’s Kraken’s Regulatory History?
While Powell is cleared, Kraken isn’t off the hook. In 2023, it paid $360K to the Treasury for violating Iran sanctions. Months later, the SEC fined Kraken $30M for offering unregistered securities. Despite this, Kraken secured a partnership with NASDAQ-listed Windtree Therapeutics to manage its BNB-based treasury operations—a rare win amid regulatory headwinds.
FAQ: Key Questions Answered
Was Jesse Powell charged with a crime?
No. The DOJ dropped all investigations in 2024.
What happened to the devices seized by the FBI?
They were ordered returned, as no evidence of wrongdoing was found.
How did this affect Kraken’s business?
Powell’s legal team cited reputational damage, but Kraken remains operational.
