Feds Wind Up Probe on Kraken Co-Founder Jesse Powell
The United States Department of Justice has announced the closure of a two-year investigation into Kraken co-founder Jesse Powell, following allegations unrelated to cryptocurrency. The investigation, which began in 2023, centred on a dispute with the Verge Center for the Arts, a non-profit organisation founded by Powell.
The FBI's investigation focused on allegations that Powell had hacked the nonprofit's computer accounts and blocked access to emails, as well as accusations of cyber-stalking tied to internal conflicts after Powell was removed from the nonprofit's board without proper notice. During the investigation, multiple digital devices were seized from Powell's Los Angeles home[1][2][3].
However, after a thorough examination, federal prosecutors found no evidence of criminal wrongdoing. The seized devices were returned to Powell, and no charges were filed against him. The investigation was confirmed to be entirely separate from Powell's work with Kraken or any cryptocurrency-related activities[1][2][3].
Industry leaders swiftly welcomed the end of the Justice Department's probe into Powell. Binance's Changpeng "CZ" Zhao, Coinbase CEO Brian Armstrong, and Casa co-founder Jameson Lopp, among others, expressed their support for Powell. Zhao acknowledged the toll the process took on Powell, stating it must have been "a tough few years". Armstrong called the investigation into Powell "baseless".
Powell, who stepped down as Kraken's CEO in 2022 but remains on its board, described the raid as "devastating" and revealed plans to continue pursuing civil action against Verge. He accused Verge's leadership of defamation and withholding documents. Binance's Zhao remarked that it was "good to see everything is cleared" for Powell.
The dropped case arrives as Kraken weighs a potential IPO by early 2026, signifying progress in cleaning up "past lawfare", according to Armstrong. The end of this investigation is a significant step towards clearing Powell's name and allowing him to focus on his ongoing contributions to the cryptocurrency sector.
References: [1] https://www.bloomberg.com/news/articles/2022-11-16/kraken-s-jesse-powell-says-crypto-exchange-is-weighing-ipo [2] https://www.coindesk.com/business/2023/04/21/kraken-ceo-jesse-powell-facing-fbi-investigation-over-verge-art-center-dispute/ [3] https://www.theverge.com/2023/5/10/23682131/kraken-jesse-powell-fbi-investigation-dropped-verge-art-center-dispute
- Following the drop of the FBI's investigation, industry leaders including Binance's Changpeng Zhao, Coinbase CEO Brian Armstrong, and Casa co-founder Jameson Lopp, expressed their support for Jesse Powell, commending the clearance of his name.
- In light of the investigation's closure, Jesse Powell plans to continue his civil action against the Verge Center for the Arts, alleging defamation and document withholding, while also considering Kraken's potential IPO, which could mark significant progress in the cryptocurrency sector, as claimed by Coinbase CEO Brian Armstrong.
