DOJ Concludes Probe into Kraken Co-Founder Over Arts Nonprofit Dispute Returns Seized Devices as Case Ends

The U.S. Department of Justice has concluded a years-long criminal investigation into Jesse Powell, co-founder of cryptocurrency exchange Kraken, which centered on allegations tied to a nonprofit arts organization rather than his work in the cryptocurrency sector. Federal agents returned dozens of seized devices—including laptops and mobile phones—to Powell’s possession following the probe’s termination, though questions persist about the agency’s initial focus on the case and the public disclosure of sensitive details by a news outlet. Powell, a prominent figure in the crypto industry and a vocal advocate for limited government, has maintained his innocence throughout the investigation.

The probe, which began with a 2023 raid on his home, stemmed from a management dispute with Verge, the arts nonprofit he founded in 2008. The nonprofit accused Powell of hacking and cyberstalking, allegations he denied in a civil lawsuit filed in state court. According to court documents, the dispute revolved around access to Slack and Google accounts rather than the more sensational claims initially reported. Powell’s legal team asserts that the returned devices contain data corroborating his account of events. The investigation’s conclusion was formally confirmed through a “declination letter” issued by the Justice Department, obtained by Powell’s attorney, Brandon Fox.

Powell, who has criticized the FBI’s actions as disproportionate, expressed relief at the investigation’s end in a statement to Fortune. He emphasized that the raid caused significant personal and professional harm, including the seizure of devices and the disruption of his work at Kraken. The termination of the case aligns with broader regulatory scrutiny of the cryptocurrency sector, though this particular inquiry was unrelated to Kraken’s operations. Powell has also criticized the FBI for leaking details of the investigation to the media, which he described as a “wild” and invasive experience.

The resolution of the Justice Department’s probe leaves lingering questions about the agency’s decision-making and the handling of sensitive information. The case highlights the complexities of navigating personal disputes in the public eye, particularly for high-profile entrepreneurs. Powell’s legal team described the probe as an effort to mitigate reputational damage to both Powell and Kraken, which is preparing for a potential public listing. The termination of the case may ease regulatory concerns for the exchange, though the broader implications for the cryptocurrency sector remain uncertain.

The Verge nonprofit, which has received over $1 million in personal donations from Powell and previously benefited from his technical support, continues to operate as a staple of the arts community. However, the ongoing legal battle underscores the reputational risks inherent in high-profile conflicts, even when criminal charges are ultimately dismissed. For Powell, the focus remains on clearing his name in the civil litigation and continuing his role in shaping the crypto industry’s regulatory landscape. The case serves as a reminder of the challenges faced by entrepreneurs entangled in both corporate and personal disputes.