DOJ Closes Multi-Year Investigation Into Kraken Co-Founder Jesse Powell Without Charges

The U.S. Department of Justice (DOJ) has concluded a multi-year criminal investigation into Jesse Powell, co-founder of cryptocurrency exchange Kraken, following allegations tied to a nonprofit arts organization. The probe, initiated in 2023, centered on disputes involving the Verge Center for the Arts, a Sacramento-based nonprofit Powell founded. The DOJ’s decision to terminate the case without charges followed court filings confirming prosecutors had informed Powell’s legal team in April 2025 that no criminal action would proceed. Seized electronic devices from an FBI raid on Powell’s Los Angeles home in 2023 were returned, with Powell’s legal team asserting the items contained evidence supporting his claim that Verge board members conspired to remove him unlawfully [1][3].

The investigation began after Verge accused Powell of “hacking and cyber-stalking” during a governance dispute, allegations he denied as baseless. Powell’s civil lawsuit against Verge alleged board members altered domain names and created new accounts to remove him from leadership, claims he says the returned devices substantiate [3]. Despite the DOJ’s non-prosecution, questions remain about the FBI’s tactics, including the high-profile raid, and how details of the probe were leaked to media outlets [5]. Powell described the raid as “devastating,” noting its personal and professional toll, while emphasizing civil litigation has affirmed his innocence. Verge’s legal team has not publicly responded to these allegations, with board member Phil Cunningham declining comment [3].

Industry figures have weighed in on the resolution. Coinbase CEO Brian Armstrong labeled the investigation “baseless,” highlighting Powell’s contributions to the crypto sector and noting the case reflects progress in addressing “past lawfare” [2]. Jameson Lopp, co-founder of Casa, described the DOJ’s decision as ending a “baseless persecution,” while Binance’s Changpeng Zhao acknowledged the ordeal’s toll on Powell but welcomed the clearance [2]. The resolution comes as Kraken approaches a potential initial public offering (IPO) in early 2026, following a $30 million settlement with the Securities and Exchange Commission (SEC) over staking services in 2024 [1].

The case underscores the crypto industry’s fraught relationship with federal regulators. While the DOJ’s decision avoids a high-profile conviction that might have intensified scrutiny of Kraken, the focus on a nonprofit dispute rather than the exchange’s core operations has raised concerns about politically motivated investigations. Some leaders view the probe as a “setback for the industry,” arguing it diverts attention from systemic regulatory challenges [2]. The lack of transparency around the FBI’s methods and Verge’s alleged document withholding further complicates the narrative, leaving unresolved tensions between legal accountability and executive rights in high-profile cases.

The DOJ’s closure of the investigation may offer temporary relief for Kraken, but lingering questions about regulatory practices and the use of legal tools to target entrepreneurs remain. As the crypto sector continues to navigate evolving oversight, the case highlights the delicate balance between law enforcement and innovation.

Sources:

[1] [The New York Times](https://www.nytimes.com/2025/07/22/technology/jesse-powell-kraken-verge-investigation.html)

[2] [CryptoPotato](https://cryptopotato.com/doj-closes-investigation-into-kraken-co-founder-jesse-powell/)

[3] [Fortune](https://fortune.com/crypto/2025/07/22/kraken-jesse-powell-fbi/)

[5] [Cointelegraph](https://cointelegraph.com/news/fbi-investigation-closed-kraken-jesse-powell)