The US Justice Department has dropped its criminal investigation into Kraken co-founder Jesse Powell. The investigation was launched in 2023 and did not focus on Powell’s crypto dealings.
Instead, it centered on allegations from the Verge Center for the Arts – a nonprofit he founded – that he had hacked its accounts and blocked email access during a governance dispute.
The FBI’s raid on the former chief executive’s Los Angeles home resulted in the seizure of dozens of devices. It drew attention due to his prominence in crypto and the broader crackdown on the sector during the Biden administration.
Newly filed court documents confirm that prosecutors informed Powell’s legal team in April that they would not pursue charges. They also returned the seized electronics, which Powell claims contain evidence supporting his position that Verge board members conspired to remove him unlawfully.
Powell, who stepped down as Kraken’s CEO in 2022 but remains on its board, described the raid as “devastating” and revealed plans to continue pursuing civil action against Verge. He also accused its leadership of defamation and withholding documents. The dropped case arrives as Kraken weighs a potential IPO by early 2026. The crypto exchange had settled with the SEC last year over its staking services for $30 million.
On X, Powell noted,
“Very glad to have this behind me. It never made sense, but neither does the Roman Storm trial. Wild how quickly you can have your life upended. I’m grateful for those who saw through it and for my stellar legal team. Now, turning my attention back to Kraken.”
Industry leaders swiftly welcomed the end of the Justice Department’s probe into the Kraken co-founder. Coinbase CEO Brian Armstrong, for one, called the investigation “baseless” while noting Powell’s contributions to the sector. He added that while the regulatory landscape still needs improvement, decisions like this signify progress in cleaning up “past lawfare.”
Casa co-founder Jameson Lopp echoed the sentiment and said that the “baseless persecution” of Powell was “finally over.” Meanwhile, Binances Changpeng “CZ” Zhao remarked that it “must be a tough few years” for Powell, and acknowledged the toll of the process before adding it was “good to see everything is cleared.”