FBI Closes Probe on Kraken Founder Jesse Powell as Exchange Eyes 2026 IPO

The FBI has concluded its investigation into Jesse Powell, founder of the cryptocurrency exchange Kraken, marking the end of a years-long legal and public relations challenge for the executive. According to a statement from the U.S. Department of Justice, the case against Powell has been formally closed, with agents returning over 30 electronic devices—including cell phones and laptops—previously seized from his residence. This development comes after the agency’s initial raid on Powell’s home in 2022, which he described as a traumatic and unjustified intrusion. The investigation, which did not implicate Kraken’s business operations, originated from a management dispute with a nonprofit organization, Verge Center for the Arts, that Powell alleges spread false information to law enforcement [1].

Powell has maintained from the outset that the allegations against him were baseless, a claim now bolstered by the returned devices, which he intends to use as evidence in ongoing legal proceedings. In a statement to Fortune, he expressed relief at the FBI’s decision but emphasized that the fallout from the investigation remains unresolved. Powell is advancing a civil suit against Verge’s board members, accusing them of fabricating claims that led to the FBI’s intervention. He specifically highlighted the failure of Verge’s board, including its legal counsel Phil Cunningham, to disclose critical documents during discovery, a shortcoming he argues undermines the nonprofit’s credibility and strengthens his civil case [1].

The resolution of the criminal investigation arrives at a pivotal moment for Kraken, which is preparing for an initial public offering (IPO) potentially as early as the first quarter of 2026. The exchange, one of the largest in the U.S., has already navigated regulatory challenges, including a 2023 settlement with the Securities and Exchange Commission (SEC) that led to the shutdown of its staking services in the country. With the FBI probe no longer a looming threat, analysts suggest Kraken may gain greater stability as it faces increasingly stringent cryptocurrency regulations. However, Powell’s high-profile legal battles, including his recent $1 million cryptocurrency donation to Donald Trump’s 2024 campaign, have drawn additional scrutiny. While officials have denied any link between Powell’s political activities and the FBI’s handling of his case, the connection remains a topic of speculation [1].

The closure of the investigation does not signal the end of Powell’s legal entanglements. His defamation lawsuit against Verge, now fortified by the returned devices, is expected to enter a critical phase as new evidence emerges. Powell’s allegations that Verge board members obstructed the discovery process could further complicate the nonprofit’s defense and influence the case’s trajectory. For Kraken, the resolution of the FBI probe removes a significant overhang, but the company’s path to an IPO remains subject to regulatory and market dynamics.

The outcome underscores the complex interplay between corporate governance, legal disputes, and regulatory oversight in the cryptocurrency sector. As Kraken moves forward with its expansion plans, the case involving Powell serves as a reminder of the challenges faced by executives in navigating both legal and political landscapes.

Source: [1] [FBI Drops Probe into Kraken Founder Jesse Powell] [https://www.livebitcoinnews.com/fbi-drops-probe-into-kraken-founder-jesse-powell/]