Jesse Powell, co-founder of Kraken, has been cleared by the U.S. Department of Justice, which dropped the investigation into hacking and cyberbullying.
The case, stemming from an internal conflict with a California art center, involved accusations of blocking access to email accounts.
Although Kraken was never the target, the case highlighted the vulnerability of crypto leaders’ reputations under regulatory and media scrutiny.
An Affair That Could Have Cost Kraken Dearly
It was one of the most sensitive cases in the crypto sector in 2023. Jesse Powell, a prominent figure in the ecosystem and co-founder of Kraken, had his home raided by the FBI. Electronic devices seized, suspicions of hacking and cyberbullying against a non-profit art center – the scenario had the potential to tarnish his reputation.
But in July 2025, the pressure eased. The U.S. Department of Justice (DOJ) has closed the case. No charges will be brought against Powell.
The Context: Internal Tensions in a Californian Art Center
At the heart of the investigation: the Verge Center for the Arts, based in Sacramento, where Jesse Powell served on the board. According to sources close to the case, the organization accused Powell of blocking access to certain email accounts and interfering with internal computer systems. A cold war resembling a settling of scores between an influential patron and institutional leaders.
Powell, on the other hand, has consistently denied the allegations. He believes he was targeted in an orchestrated attempt to oust him by the center’s leaders, denouncing the manipulation of justice in an internal dispute.
A FBI Raid That Sent Shockwaves
The FBI’s search of Powell’s residence in Los Angeles in 2023 made headlines. At the time, the case was reported by the New York Times, immediately heightening tensions around crypto exchanges, already under regulatory pressure.
Powell himself described the intervention as a ‘devastating experience, both personally and professionally’. Even though the investigation did not involve Kraken, speculation was rife.
Kraken Cleared, But Regulatory Shadow Looms
Since the beginning of the case, Kraken has made it clear they were not the target. A company spokesperson stated in 2023 that the investigation did not concern the platform itself and there were no indications of expanding the probe beyond the personal conflict.
However, such events highlight how delicate the line between leaders and companies is in the public eye and among regulators. Amid a wave of U.S. authorities’ crackdown on crypto players for non-registration and fraud, caution was more critical than ever.
A Relief for Powell, a Reminder for the Industry
Now serving as the chairman of Kraken’s board after stepping down as CEO in 2022, Jesse Powell can breathe a sigh of relief. But this case underscores how vulnerable the personal image of crypto leaders remains, even outside the strictly professional realm.
The lesson is clear: in an atmosphere of widespread distrust, a mere accusation is enough to shake a Web3 figure. And each dropped case only underscores the need to differentiate private conflicts from regulatory responsibilities.
