Federal Prosecutors Close Inquiry Into Co-Founder of Kraken Crypto Exchange

Technology|Federal Prosecutors Close Inquiry Into Co-Founder of Kraken Crypto Exchange

The Justice Department said it recently ended a criminal investigation into Jesse Powell, a co-founder of the Kraken cryptocurrency exchange, according to court documents.

In 2023, the F.B.I. searched Mr. Powell’s home in Los Angeles as part of an investigation into claims that he had illicitly gained access to and interfered with the online accounts of Verge Center for the Arts, a Sacramento-based nonprofit. Mr. Powell started Verge in 2007, and its leadership removed him from the board of directors in 2022, citing violations of the organization’s “guiding principles.”

Mr. Powell later sued Verge for defamation and fraud.

In a letter last month from the U.S. attorney’s office for the Northern District of California to Mr. Powell’s representatives, which was reviewed by The New York Times, the U.S. attorney said “an appropriately authorized investigation” was opened into “allegations of criminal conduct,” and the investigation was closed in April. The U.S. attorney’s office said it reserved the right to reopen the inquiry, according to the letter.

A representative for the U.S. attorney’s office did not return a request for comment.

In a statement on Tuesday, Mr. Powell called the raid on his home “devastating both personally and professionally” and vowed to continue his lawsuit against Verge.

“I will continue to pursue the appropriate legal remedies against those who created this disaster by making false statements to law enforcement,” he said.

Phillip Cunningham, a lawyer for Verge, declined to comment.

Mr. Powell helped build Kraken into one of the largest U.S. crypto exchanges. But he stepped down as chief executive in 2022 after The Times reported on how he incited debates about race and gender in the workplace. Shortly after, Verge tried to cut ties with its founder.

After Mr. Powell’s dismissal, Verge accused him of blocking employees from using the organization’s website, emails and internal messaging system, and accessing confidential information stored in those accounts, according to a 2022 letter from Mr. Cunningham to Kraken. Months later, the F.B.I. raided Mr. Powell’s home.

David Yaffe-Bellany contributed reporting from New York.