FBI Investigates Kraken Co-Founder Jesse Powell: What Happened?

Jesse Powell, co-founder of the major cryptocurrency exchange Kraken, found himself at the center of a federal investigation that raised eyebrows across the crypto world. But what exactly happened—and why was the FBI involved?

Why Was Jesse Powell Under Investigation?

The FBI launched a probe into Jesse Powell in connection with a nonprofit organization, Verge Center for the Arts, which Powell helped found. Allegations surfaced claiming Powell had unauthorized access to internal accounts—Slack, Google Drive, and email platforms—following disputes with the board of directors.

This triggered a federal investigation, leading to a search and seizure operation at Powell’s Los Angeles residence in 2023, where agents confiscated multiple digital devices, including phones and laptops.

Was Kraken Involved?

Despite Powell’s role at Kraken, the investigation was entirely unrelated to cryptocurrency activities or the Kraken exchange itself. No accusations were made regarding Kraken’s business practices, user funds, or platform integrity. The case revolved solely around Powell’s personal and nonprofit-related activities.

What Did Jesse Powell Say?

Powell denied any wrongdoing from the start. He claimed the allegations were rooted in an internal power struggle within the nonprofit and that his access to the organization's digital infrastructure was legal and justifiable. His legal team further argued that the board was attempting to retaliate after his removal.

In response, Powell filed a civil lawsuit against the Verge board members, citing defamation, wrongful removal, and concealment of financial records.

What Was Seized During the FBI Raid?

Federal agents seized:

• Laptops
• Mobile phones
• Hard drives

These devices reportedly contained communications and nonprofit account credentials that authorities wanted to examine.

What’s the Current Status?

While the federal investigation progressed largely out of public view, major developments have since emerged. The situation has taken a turn—and the resolution may surprise those who assumed deeper wrongdoing.

The fallout now shifts to the ongoing civil litigation between Powell and Verge’s board.

Update: The Investigation Is Now Closed

As of July 2025, the FBI investigation into Jesse Powell has officially ended. The Department of Justice declined to press charges, issuing a formal notice and returning all seized electronic devices. With no evidence of criminal wrongdoing, the case has been closed, leaving Powell to continue his civil claims against the Verge board in a separate legal process.

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