Kraken Founder Cleared as FBI Abandons Probe – Crypto Industry Breathes Easy
In a move that sent shockwaves through crypto circles, the FBI has abruptly dropped its investigation into Kraken's founder. No explanations, no charges—just radio silence from the feds.
What this means for crypto
Regulatory overreach just hit a wall. With Kraken's legal team popping champagne (or at least organic cold-pressed juice), the case collapse signals a rare win for exchange operators in Washington's crosshairs. Meanwhile, SEC chair Gary Gensler probably just added another 'unregulated' PowerPoint slide to his collection.
The takeaway? When even the FBI can't find dirt on an exchange founder, maybe—just maybe—crypto's compliance game is stronger than Wall Street wants to admit. (But let's not get carried away—this is still the industry that brought you 'stablecoins' pegged to memes.)
FBI drops investigation into Kraken crypto exchange founder. pic.twitter.com/xLZoNTD51h
— Watcher.Guru (@WatcherGuru) July 22, 2025
In an email statement to Fortune, Powell expressed relief that the probe has ended. However, he added that he intends to continue his civil lawsuit against members of Verge’s board. “The FBI’s raid on my house was devastating both personally and professionally. It is still shocking that the raid was premised on Verge Center for the Arts baseless accusations against me. I knew that I had done nothing wrong, and discovery in my defamation case against Verge has shown this is undeniable,” said Powell.
Authorities launched the investigation after allegations surfaced in early 2022 that Powell had hacked into Verge’s accounts and blocked access to key messages, claims that he strongly denied. Powell was removed from the Verge Center for the Arts’ board of directors, leading to his lawsuit against the Verge Center.
Brandon Fox, Powell’s attorney, received a declination letter from the DOJ confirming the probe’s closure. Fox indicated this development was important for restoring Powell’s reputation and Kraken’s regulatory standing. The FBI has also returned to Powell the devices seized from him before the raid, but it is unclear if his crypto holdings were stored on those devices.
