FBI Closes 2-Year Probe into Kraken Co-Founder Jesse Powell Over Verge Center Dispute; No Charges Filed : 15 : Causality (dispute-driven investigation), outcome (case closed), clarity (unrelated to Kraken), factual precision (no charges).

Jesse Powell, co-founder of the cryptocurrency exchange Kraken, became the subject of an FBI investigation in 2023 linked to a nonprofit organization he co-founded, Verge Center for the Arts. The probe centered on allegations that Powell accessed internal systems—Slack, Google Drive, and email accounts—without authorization following a dispute with the organization’s board. Federal agents executed a search of Powell’s Los Angeles residence, seizing multiple digital devices, including laptops, phones, and hard drives, to examine potential evidence of misconduct. Despite his prominent role in the crypto industry, the investigation was explicitly unrelated to Kraken’s operations, user funds, or any cryptocurrency-related activities.

Powell has consistently denied wrongdoing, asserting that his access to Verge’s digital systems was legal and part of a broader internal power struggle. His legal team argued the board’s actions were retaliatory after his removal from the organization. In response, Powell filed a civil lawsuit against the Verge board, alleging defamation, wrongful removal, and financial record concealment. The case has since shifted focus to these civil proceedings, as the federal investigation progressed under public scrutiny.

The FBI’s probe concluded in July 2025 when the U.S. Department of Justice formally closed the case due to insufficient evidence of criminal activity. All seized devices were returned to Powell, and no charges were filed. Authorities cited the lack of admissible proof to support accusations of hacking or cyberstalking, a challenge common in digital crime investigations where evidence can be ambiguous or difficult to verify. The resolution of the case removes any direct legal consequences for Powell, though his civil claims against the Verge board remain active.

The closure of the investigation highlights the complexities of prosecuting disputes involving digital systems, particularly when private conflicts intersect with public attention. Prosecutors emphasized the difficulty of establishing actionable evidence in cases where allegations revolve around unauthorized access or internal organizational disputes. For Kraken, the case reaffirms that the probe was unrelated to its business practices, with the exchange reiterating its commitment to operational integrity. Analysts note the case underscores the need for clear legal standards in digital crime, as overlapping personal and professional roles in the crypto sector create unique regulatory challenges.

The outcome also raises broader questions about the threshold for federal investigations in non-criminal contexts. While the DOJ’s decision signals no further action, the episode illustrates how personal disagreements can escalate into high-profile legal scrutiny. For Powell, the resolution allows him to continue his advocacy for decentralization and financial privacy without the distraction of ongoing litigation. The case remains a cautionary example of the legal gray areas surrounding digital misconduct and the importance of evidentiary rigor in such inquiries.