Justice Department Ends Kraken’s Co-founder Probe, Returns Seized Devices

The U.S. Department of Justice has officially ended its investigation into Kraken co-founder Jesse Powell, according to a Fortune report.

The probe, which began nearly two years ago, resulted in an FBI raid that saw the seizure of dozens of Powell’s laptops and phones. Those devices have now been returned, signaling the closure of the case.

Importantly, the investigation had no connection to Powell’s role at the crypto exchange Kraken. Instead, the case centered around a governance dispute at Verge Center for the Arts, a nonprofit Powell helped establish in Sacramento back in 2008.

Allegations stemmed from nonprofit board feud

The conflict originated after Powell was removed from Verge’s board. Reports initially claimed he had “hacked and cyber-stalked” the nonprofit, according to The New York Times. However, later court filings revealed a more mundane dispute over control of Verge’s internal communication tools, including Google Workspace and Slack accounts.

Powell has maintained that he did not deny anyone access and accused Verge members of secretly creating a parallel digital infrastructure to sideline him.

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Civil lawsuit continues in state court

While the federal investigation has concluded, Powell remains locked in a civil legal battle in California state court. He’s suing former Verge board members for wrongful removal and defamation, asserting that they orchestrated a smear campaign to push him out of the organization he founded.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.