- Jesse Powell was cleared of charges that weren’t related to Kraken or its crypto business.
- Kraken is moving forward with IPO plans after closing both the SEC and FBI matters.
- Powell’s returned devices may have held Bitcoin that has gained value since 2023.
The U.S. Federal Bureau of Investigation has officially ended its probe into Jesse Powell and returned property seized during its 2023 raid. The search of Powell’s home, reportedly unrelated to Kraken’s operations, marked a turning point during federal scrutiny of the crypto sector.
The investigation focused on Powell’s involvement with the Verge Center for the Arts, a nonprofit he co-founded in 2008. The FBI had alleged that Powell engaged in cyberstalking and unauthorized access related to Verge, not Kraken. Federal agents seized dozens of electronic devices, including laptops and phones, from his residence.
His lawyer received the confirmation letter from the U.S. Attorney’s Office for the Northern District of California. Attorney Harmeet Dhillon, representing Powell, said the letter followed repeated requests, including one from attorney Andrew Fox, asking for clarity on the case’s resolution.
Legal Closure Comes Amid Kraken’s IPO Preparations
The timing of the legal closure is notable, as Kraken prepares for a potential initial public offering (IPO) by early 2026. Powell stepped down as CEO in 2023 but still serves on Kraken’s board of directors. The company remains one of the largest U.S.-based cryptocurrency exchanges despite increasing regulatory pressure.
In 2023, the U.S. Securities and Exchange Commission accused Kraken of operating without proper registration. That case was later dropped in March 2025 under Acting Chair Mark Uyeda. It marked a broader shift in the SEC’s approach, which saw multiple crypto-related cases, including those against Ripple, Gemini, and Coinbase, dismissed within weeks.
Kraken previously settled with the SEC over its U.S. staking services and agreed to end that product offering. These enforcement setbacks, now behind the company, may offer a clearer path toward IPO ambitions.
Fallout at Verge Raises Further Legal Disputes
The dispute with Verge Center for the Arts appears far from over. Powell’s latest legal filings allege that Verge board members, including attorney Phil Cunningham, withheld key evidence during the discovery process. Verge, still active in Sacramento’s art scene, reportedly benefited from over $1 million in donations and technical support provided by Powell.
Powell said in a statement that the raid was “devastating both personally and professionally,” calling Verge’s accusations “baseless.” He vowed to pursue legal remedies against those responsible for initiating the claims.
Devices said to have been returned to Powell reportedly included computers and phones. It remains unknown whether they contained Bitcoin or anything else in the way of digital assets. When they were taken away, Bitcoin was priced around $23,000. At press time, BTC is trading close to $119,000.
Related: Kraken Secures MiCA License to Expand Crypto Services in EU
Tensions Linger Between Crypto Leaders and U.S. Agencies
Powell has come to be recognized in crypto circles not just for his co-founding role at Kraken, but also because of his outspoken political opinions on the internet. A critical profile on Powell appeared in 2022 in The New York Times, citing controversial comments about gender and pronouns.
The closure of the FBI case indicates the waning scrutiny on crypto characters after its aggressive enforcement for years. The reversals by federal agencies raise doubts in the minds of observers as to what stance they will take toward digital asset leaders in the coming times.
Kraken’s leadership and lawyers are planning for upcoming challenges, as increased attention is expected with a corporate listing. Regulatory landscapes are continually shifting, while the company maintains its status as a leading U.S. crypto exchange.
