The U.S. Justice Department has concluded its two-year investigation into Jesse Powell, founder of the cryptocurrency exchange Kraken, returning dozens of seized laptops and mobile phones, Fortune reported. The federal probe, which garnered headlines after an FBI raid on Powell’s home, was not related to Kraken’s operations but stemmed from a contentious governance dispute at the Verge Center for the Arts, a Sacramento nonprofit Powell established in 2008.
News of the raid initially surfaced in The New York Times, which reported that agents were investigating allegations that Powell had “hacked and cyber-stalked” the nonprofit. However, subsequent court filings revealed a less dramatic scenario: a dispute over control of Slack and Google Workspace accounts after Powell’s removal from Verge’s board.
Powell has consistently maintained he never cut off access to these accounts. Instead, he argues that Verge insiders created a new domain and parallel work accounts before moving to oust him. He is currently pursuing a civil lawsuit in state court, alleging defamation and wrongful removal against his former colleagues.
Documents filed this week by Powell include a “declination letter” from prosecutors, confirming the Justice Department has formally dropped the case. Powell’s attorney stated the letter was requested to counteract the reputational damage caused by the raid and to assure banks and regulators that Kraken’s leadership is not under federal scrutiny.
Powell described the search as “personally and professionally devastating,” asserting that discovery in his civil lawsuit has already shown the accusations to be baseless.
Despite the government’s exit, unanswered questions remain. Neither the Justice Department nor the FBI has commented on how The New York Times obtained details of the investigation.
Powell’s recent filings also accuse two Verge board members, including attorney Phil Cunningham, of withholding key documents during discovery in his civil case.
The Verge Center for the Arts continues to operate as a prominent fixture in Sacramento’s arts scene, having received over $1 million in donations and extensive technical assistance from Powell throughout the years.
Notably, Powell declined to disclose whether the returned devices contained Bitcoin or other digital assets. When the hardware was seized two years ago, Bitcoin (BTC) was trading near $23,000. As of press time, BTC is trading near $119,000.
