US federal prosecutors have closed the investigation into Jesse Powell, founder of crypto exchange Kraken, in relation to his conflict with Verge Center for the Arts.
Allegations Against Powell
According to government documents seen by Fortune, the US Department of Justice concluded its probe into Powell, who was accused of illegally accessing digital accounts belonging to Verge Center for the Arts. The FBI searched Powell’s residence in March 2022 and seized dozens of laptops and devices based on claims made by Verge that Powell had blocked access to emails and Slack channels used by the organization.
Powell and His Lawyer's Response
Powell’s lawyer, Brandon Fox, confirmed that the allegations were in no way related to Mr. Powell’s employment or his conduct in the crypto industry. In response to the government’s dropped investigations, Fox said the Department of Justice sent them a declination letter stating the case was now closed. He stated, "We sought the letter to help offset the damage done to Jesse’s reputation and to Kraken’s operations in a highly regulated industry."
Legal Consequences and Kraken's Relations with Authorities
Powell has been denying the accusations both in court and in the press, and filed a civil lawsuit against members of Verge’s board. He indicated that the devices seized by the FBI contain messages and internal memos from Verge that corroborate his statements. Despite being cleared of Verge's accusations, Kraken has faced fines from US financial authorities for various regulatory breaches.
The conclusion of the investigation against Jesse Powell highlights the complex relationship between the cryptocurrency industry and regulators. Nonetheless, questions remain about Kraken's future in light of past fines and regulatory scrutiny.