Federal Prosecutors Decline to Charge Kraken Founder Jesse Powell

• DOJ quietly ends Jesse Powell probe, no charges after two years of federal scrutiny
• Powell’s legal clash with Verge centered on disputed access to nonprofit’s digital tools
• Civil lawsuit continues as Powell seeks accountability over leaked FBI investigation

The Department of Justice has quietly closed its two-year investigation into Jesse Powell, the founder of cryptocurrency exchange Kraken. The move comes after federal agents raided his home and seized dozens of electronic devices in a high-profile event. 

Although the raid suggested serious allegations, the matter centered on a dispute with a nonprofit Powell founded, not on any wrongdoing related to his crypto business. The dropped investigation now raises questions about the agency’s aggressive approach and how details of the case reached the media.

The case rooted in a nonprofit dispute, not crypto

At the center of the controversy is the Verge Center for the Arts, a Sacramento-based nonprofit Powell founded in 2008. While initial media reports claimed Powell had hacked and cyber-stalked the nonprofit, court filings later revealed the conflict was over access to digital accounts, specifically the ownership of Slack and Google accounts linked to the organization.

Related: FBI Joins Manhunt for North Korea’s Lazarus Group as Laundering Effort Intensifies

Powell has always maintained that he never cut off anyone’s access. Instead, he accuses two board members of conspiring to oust him and create new systems without his knowledge. These claims are part of an ongoing civil lawsuit Powell himself filed in state court.

The DOJ closes the case with no charges filed

The Justice Department recently issued a formal “declination letter,” a document confirming that its investigation has been officially closed. This letter followed the government’s return of Powell’s personal and professional devices, including laptops and phones, which his legal team says contain evidence supporting his version of events.

The federal probe, which never resulted in any charges, created substantial disruption in Powell’s life and added friction to Kraken’s regulatory standing as it works toward a public listing. Powell’s attorney reportedly pushed for the declination letter to help repair the reputational damage caused by the initial raid and subsequent media leaks.

Lingering questions about the case and its fallout

The dropped case is a significant relief for Powell, who has expressed frustration over what he described as baseless accusations. While the criminal matter is over, he plans to continue his civil suit against the leadership at Verge. The nonprofit, which has received over $1 million in support from Powell since its founding, remains active in Sacramento’s arts scene.

Related: FBI: North Korea’s “TraderTraitor” Gang Behind $1.5B Bybit Hack

Meanwhile, questions persist about how the details of the FBI’s investigation were leaked to national media in the first place. The Justice Department has not commented on the source of the leaks.