The FBI has ended its investigation into Jesse Powell, co-founder and former CEO of the cryptocurrency exchange Kraken, with no criminal charges filed. The probe, which began in 2023, centered on allegations from the Verge Center for the Arts, a nonprofit Powell co-founded, claiming he hacked their computer accounts and obstructed access to emails. The investigation led to a raid on Powell’s home in Los Angeles, where the FBI seized laptops, cellphones, and other devices.
These devices have since been returned, and on April 8, 2025, the U.S. Attorney’s Office for the Northern District of California issued a declination letter confirming the case’s closure, as requested by Powell’s attorney, Brandon Fox, to mitigate reputational damage. Powell has maintained that the accusations were baseless, stemming from a management dispute at Verge rather than criminal activity.
He has filed a civil lawsuit against Verge’s board members, alleging they conspired to remove him and made false statements to law enforcement. Court filings suggest the dispute involved control over Slack and Google Workspace accounts, not hacking or cyberstalking as initially reported by The New York Times. Powell claims the returned devices contain evidence supporting his version of events.
The investigation was unrelated to Kraken’s operations or the broader cryptocurrency industry. Powell, who stepped down as Kraken’s CEO in 2023 but remains a board member, expressed relief at the resolution, noting the raid’s devastating personal and professional impact. Kraken is reportedly preparing for a potential initial public offering by early 2026.
The FBI’s decision not to file charges clears Powell of criminal allegations, potentially restoring his credibility. His civil lawsuit against Verge’s board members suggests he’s actively seeking to counter reputational damage. The return of seized devices and the declination letter are public signals of vindication. As Kraken prepares for a possible IPO in 2026, the resolution reduces uncertainty around its leadership. Powell’s continued role as a board member ensures his influence, and a cleared investigation avoids negative optics for investors.
Powell’s statements about the raid’s “devastating” effects highlight the personal toll of such investigations, even when no charges are filed. This could fuel his narrative of being unfairly targeted, strengthening his resolve in ongoing legal battles.
The investigation, though unrelated to Kraken’s operations, underscores the intense scrutiny crypto figures face. High-profile individuals like Powell are often lightning rods for regulators, amplifying perceptions of crypto as a risky or unregulated space. The case’s closure may bolster confidence among crypto investors and users, signaling that not all allegations against industry leaders hold water. However, it also highlights the need for clearer regulatory frameworks to avoid missteps that damage reputations or markets.
The dispute’s roots in a nonprofit’s management conflict, rather than crypto-specific issues, shows how personal or unrelated legal battles can spill into the public crypto narrative, complicating perceptions of the industry. The FBI’s decision to drop the case without charges may fuel skepticism among crypto advocates who view law enforcement as overly aggressive toward the industry. Conversely, traditional finance supporters might see the investigation as justified due diligence.
Powell’s civil lawsuit against Verge’s board could set a precedent for how crypto figures address reputational attacks through litigation, particularly when allegations lead to government action without evidence. The case highlights a persistent divide between crypto advocates and traditional institutions. Crypto proponents, including Powell, often frame investigations as overreach by regulators wary of decentralized finance.
Within the crypto space, there’s a divide between those who see figures like Powell as pioneers pushing against establishment constraints and others who advocate for compliance to gain mainstream legitimacy. Powell’s outspoken criticism of regulatory overreach aligns with the former, potentially deepening tensions with pro-regulation factions.
The Verge dispute also reveals internal conflicts in crypto-related ventures, where governance issues (e.g., control over digital assets like Slack accounts) can escalate into legal battles, reflecting broader challenges in decentralized organizations. The case amplifies a divide in how the public views crypto leaders: as either visionary entrepreneurs or potential bad actors. High-profile
Media coverage, such as The New York Times’ initial report on hacking and cyberstalking, shapes narratives that can linger, deepening the divide between crypto’s supporters and detractors. The FBI’s decision to drop the investigation into Jesse Powell is a win for him and Kraken, potentially boosting confidence as the company eyes an IPO.
However, it underscores ongoing tensions between the crypto industry and regulatory bodies, as well as divides within the crypto community and public perception. The case reflects broader challenges in balancing innovation, regulation, and trust, with Powell’s experience likely to fuel debates about the future of crypto’s integration into mainstream finance.
