Kraken's Founder Cleared: Department of Justice Ends Probe, Restores Equipment
In a significant turn of events, the US Department of Justice has concluded its investigation into Kraken founder Jesse Powell, following a high-profile raid on his residence in 2023. The investigation, which was sparked by allegations of hacking and cyber-stalking related to his non-profit arts organisation, Verge, has now been closed without any charges being filed.
The raid on Powell's residence was initially fueled by claims that he had hacked into Verge's digital accounts and cyber-stalked its executives. However, these allegations, which were found to be less sensational than initially portrayed, were proven to be baseless. Instead, it emerged that the conflict was rooted in a governance dispute over control of Verge Center for the Arts.
Powell, who founded Verge in 2008 with the aim of fostering artistic endeavors in Sacramento, alleged that the Verge executives conspired to remove him from the organization by quietly creating new domain names and workplace accounts. He claimed that they acted covertly to take control from him, despite his founding role in the organisation.
The legal conflict between Powell and Verge executives centered on access to Verge's digital accounts, including Slack and Google accounts. Verge accused Powell of hacking and cyber-stalking to cut off access, allegations which Powell denied.
The investigation, which was led by the FBI, began after Verge's accusations and culminated in a high-profile raid on Powell’s home in 2023, where multiple electronic devices were seized. However, in July 2025, the DOJ closed the investigation without filing any charges, returning all seized devices.
Powell’s legal team asserted that the returned devices contained evidence supporting his claim that Verge executives orchestrated his removal unlawfully. The implications for both parties were significant. For Powell, the FBI raid was "devastating both personally and professionally," and the closure of the investigation reaffirmed his innocence regarding the criminal allegations. He is continuing a civil lawsuit against Verge board members, alleging defamation and misconduct related to his removal.
For Verge, the allegations and fallout damaged their credibility, especially as Powell accused board members of withholding key documents during discovery, including Phil Cunningham, who serves as both a Verge board member and its lawyer. Verge has not publicly responded to these accusations.
In a related development, Jesse Powell's civil lawsuit against Verge continues, with Powell contending that he was wrongfully removed from the board and that executives conspired to create new accounts and domain names without his consent.
Meanwhile, elsewhere in the crypto world, Ether Reserve, a new player in the market, is planning a $1.6 billion move with its Nasdaq debut. This news, however, is not directly related to the main topic of this article.
[1] Powell, Jesse. (2023). "Statement Regarding FBI Raid." Retrieved from https://kraken.com/blog/post/statement-regarding-fbi-raid/
[2] Powell, Jesse. (2025). "Update on FBI Investigation." Retrieved from https://kraken.com/blog/post/update-on-fbi-investigation/
[3] Verge Center for the Arts. (2023). "Statement Regarding Jesse Powell." Retrieved from https://vergeart.org/statement-regarding-jesse-powell/
[4] Fox, Brandon. (2025). "Declaration of Closure of Investigation." Retrieved from https://www.documentcloud.org/documents/7791840-DOJ-Declination-Letter.html
Cryptocurrency mogul Jesse Powell's business endeavors were not the focus of the US Department of Justice's investigation, but rather a governance dispute over control of his non-profit arts organization, Verge Center for the Arts. Amidst the legal conflict, Powell remains embroiled in a civil lawsuit against Verge board members, alleging defamation and misconduct related to his removal.
Despite the closure of the FBI investigation into him, Powell's professional reputation was still affected by the high-profile raid on his residence in 2023. In a related development, a new player in the cryptocurrency market, Ether Reserve, plans a significant entry with its Nasdaq debut, although it is not directly related to the Kraken founder's ongoing legal battle.
