Nikolas Sargeant
The United States Department of Justice has dropped its criminal investigation into Kraken co-founder Jesse Powell over allegations tied to a nonprofit organization, according to reports published Tuesday. The Justice Department has now returned dozens of laptops and cellphones it seized from Powell's residence during a 2023 raid.
The federal investigation stemmed from a management dispute with an arts nonprofit Powell had founded, the Verge Center for the Arts. FBI agents had raided the crypto entrepreneur's Los Angeles house over claims that he hacked and cyber-stalked his own nonprofit arts group. The probe was unrelated to Powell's cryptocurrency exchange operations or business conduct at Kraken.
Federal authorities closed the criminal investigation after finding no evidence of wrongdoing by Powell in the nonprofit case. The Department of Justice sent Powell's legal team a "declination letter" stating the case was now closed. Court documents revealed that Verge Center board members allegedly withheld key communications during civil discovery proceedings, which may have contributed to the investigation's conclusion.
The closure of the case comes as Kraken weighs the possibility of an initial public offering by the first quarter of 2026. Powell stepped down as Kraken's CEO in 2023 but remains on the company's board of directors. The resolution of this federal investigation removes a potential regulatory overhang as the cryptocurrency exchange considers going public.
The dismissal marks another positive regulatory development for Kraken, which has recently seen several legal victories. In March 2024, the Securities and Exchange Commission dropped its lawsuit against the exchange without penalties, ending what Kraken called a "wasteful, politically motivated campaign." The SEC had alleged that Kraken was operating as an unregistered broker-dealer, but the case was dismissed with prejudice.
Meanwhile, Kraken continues expanding its global operations despite regulatory challenges. The exchange secured a MiCA license in Ireland in January 2025, allowing it to offer cryptocurrency services across 30 European Economic Area member states. The company has also announced plans for a strategic return to India's crypto market, appointing Shiprocket co-founder Vishesh Khurana as an advisor to spearhead operations in the region.
