The Federal Bureau of Investigation (FBI) has officially closed its two-year investigation into Jesse Powell, the founder of cryptocurrency exchange Kraken. According to a press release, the probe, initiated in September 2022, focused on allegations of hacking and cyberstalking stemming from a dispute with the Verge Center for the Arts, a Sacramento nonprofit he founded in 2008.
FBI Drops Probe On Jesse Powell
According to reports, the investigation was sparked by allegations that Powell had accessed the nonprofit’s computer accounts and blocked access to emails and online communications. In March 2023, the FBI raided Powell’s home in Los Angeles, seizing multiple laptops and mobile devices as part of the investigation. However, Powell strongly denied these allegations, asserting that the dispute was actually over a management issue involving access to Slack and Google accounts.
Notably, the Justice Department has decided not to pursue charges against Powell, issuing a declination letter that marks the official end of the investigation. Following the closure, these devices have been returned to Powell, with his attorney, Brandon Fox, confirming that they contained information supporting Powell’s version of events.
Despite the investigation’s closure, Powell plans to proceed with a civil lawsuit against Verge’s board members. He alleged that they conspired to remove him from the organization and lock him out of digital accounts.
Expressing his displeasure, Powell said:
“The FBI’s raid on my house was devastating both personally and professionally. It is still shocking that the raid was premised on Verge Center for the Arts baseless accusations against me. I knew that I had done nothing wrong, and discovery in my defamation case against Verge has shown this is undeniable.”
Impact on Kraken
The conclusion of this investigation is seen as a positive development for Powell’s reputation and potentially for Kraken’s regulatory standing. Kraken has continued to innovate and expand its services during the investigation, including unveiling new product features and targeting an initial public offering (IPO). The exchange has also extended its tokenized US equities offering to Binance Chain, enhancing multi-chain access for its users.
Recall that, five months earlier, the U.S Securities and Exchange Commission agreed to dismiss its lawsuit against Kraken, without penalties or changes to its business operations. This marks a significant victory for the crypto industry, lifting uncertainty and encouraging growth, innovation, and investment in the sector.
