Kraken’s Co-Founder Jesse Powell Cleared of Hacking Charges After FBI Investigation

The FBI ended its investigation into Jesse Powell over alleged hacking of a nonprofit. Powell faces no criminal charges, and the devices seized have reportedly been returned.

According to Fortune report, the FBI has officially closed its criminal investigation into Jesse Powell, co-founder of cryptocurrency exchange Kraken, and returned devices seized during a 2023 search. Powell faced allegations of hacking the Verge Center for the Arts, a nonprofit he helped found, but federal prosecutors decided not to press charges.

The Investigation and Its Alarming Beginnings

In 2023, the FBI launched an investigation into Powell following accusations by the Verge Center for the Arts, a nonprofit he helped found. The nonprofit alleged Powell hacked its computer accounts and blocked access to key emails. As part of the inquiry, federal agents searched Powell’s home and seized electronic devices, including laptops and phones.

The Justice Department dropped its probe into Kraken co-founder Jesse PowellGood scoop @jeffjohnroberts 🔥 pic.twitter.com/FiPssoGtO0

Despite the seriousness of the allegations, court documents and statements from Powell’s attorney later revealed that the investigation focused solely on Powell’s relationship with the nonprofit and was not connected to his role at Kraken. Prosecutors confirmed they would not file criminal charges and would return all confiscated devices.

Legal and Regulatory Context

Powell stepped down as Kraken’s CEO in 2023 but remains involved as a board member. Kraken has faced its own challenges with U.S. regulators. The Securities and Exchange Commission (SEC) filed a complaint accusing the exchange of operating without proper registration, but later dropped the case and settled regulatory claims. These regulatory issues were separate from the FBI’s investigation into Powell.

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Powell’s political activity, including a $1 million crypto donation to former President Donald Trump’s 2024 campaign, drew attention amidst changing leadership at the DOJ and FBI. Still, officials have not linked this to the probe’s conclusion.

Powell has reportedly filed a civil lawsuit against Verge Center’s board members, claiming they made false statements that led to the FBI investigation. Meanwhile, Kraken is reportedly preparing for a possible initial public offering as early as 2026, aiming to strengthen its market position after years of regulatory scrutiny.