FBI Drops Investigation into Kraken Founder Jesse Powell and Returns Seized Devices
FBI has officially dropped its investigation into Jesse Powell, founder of the cryptocurrency exchange Kraken, and has returned dozens of electronic devices seized during a raid on his home two years ago.
The investigation, contrary to public speculation, was unrelated to Kraken’s crypto operations. Instead, it arose from an internal conflict with Verge Center for the Arts, a non-profit Powell established in 2008 to support the Sacramento art community.
Details on Jesse Powell Investigations
The federal inquiry reportedly centered on accusations that Powell had hacked and cyberstalked Verge staff. However, court documents paint a different picture.
The disagreement centered on access to workplace tools, including Slack and Google accounts, following Powell’s removal from Verge’s board. Powell maintains he never engaged in unlawful activity and accuses two board members of conspiring to exclude him, even setting up new systems behind his back.
News of the FBI’s search was first reported by the New York Times in 2023, raising eyebrows given Powell’s outspoken views and history of criticizing progressive ideologies. In a recent statement, Powell described the raid as both personally and professionally traumatic, calling the accusations baseless and motivated by internal politics at Verge.
More on the Investigation Process
Legal filings submitted by Powell now show that the devices seized, including cell phones and laptops, contained data confirming his version of events. He also alleges that Verge board members failed to submit critical evidence during the discovery phase of his civil lawsuit, an especially significant claim, given that one of the accused, Phil Cunningham, is Verge’s legal counsel. Cunningham has not responded to these allegations.
Powell’s attorney, Brandon Fox, secured a declination letter from federal prosecutors, confirming the closure of the case. The letter is seen as essential to mitigate the reputational harm Powell and Kraken endured during the process, especially in an industry under tight regulatory scrutiny.
The Justice Department has not addressed how details of its investigation were leaked to the press. Verge, meanwhile, continues to operate in Sacramento’s art scene, despite the ongoing civil case and strained relationship with its founder, who reportedly contributed over $1 million and provided substantial technical support.
Powell has not disclosed whether the returned devices contained cryptocurrency assets. Notably, Bitcoin’s value has skyrocketed from around $23,000 at the time of the raid to approximately $120,000 today.
