Cryptocurrency
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FBI drops probe of Kraken founder, returns dozens of seized devices

July 22, 2025
02:29 PM
4 min read
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The FBI raided Jesse Powell's home after an arts non-profit falsely accused him of hacking.

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cryptocurrency

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July 22, 2025

02:29 PM

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Fortune

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What caught my attention is Regulators·krakenFBI drops be of Kraken founder, returns dozens of seized devicesBy Jeff John RobertsBy Jeff John RobertsEditor, Finance and CryptoJeff John RobertsEditor, Finance and CryptoJeff John Roberts is the Finance and Crypto editor at Fortune, overseeing coverage of the blockchain and how nology is changing finance

SEE FULL BIO Powell in a 2014 pic (this bears monitoring)

Additionally, Moreover, When federal agents raided the of Kraken founder Jesse Powell two years ago, the Justice Department was in the midst of a sweeping legal campaign against the cryptocurrency industry (which is quite significant)

The raid, however, had nothing to do with how Powell operated his crypto exchange but instead stemmed from a management dispute with an arts non-fit he had founded

The Justice Department has now dropped the investigation and returned dozens of laptops and cellphones it seized from Powell’s —but questions remain why the agency pursued him so aggressively, and how news of the raid leaked to reporters at the New York Times

Powell is a well known figure in the crypto industry

Along with building Kraken, an early cryptocurrency exchange that is on its way to go public, Powell is known for his outspoken political views that he frequently s on social media

Moreover, In 2022, the New York Times published an unflattering file, highlighting Powell’s s to Kraken staff that challenged gressive orthodoxy on topics nouns and gender

The ing year, the Times broke the news of how the FBI had ed Powell’s house as part of an investigation into allegations the Kraken founder had “hacked and cyber-stalked a nonfit that he founded. ” Despite the dramatic description, the facts turned out to be more banal

Documents in a civil case filed by Powell against the non-fit, known as Verge, indicate the dispute turned on access to Slack and Google accounts

Additionally, In the lawsuit, filed last year in state court, Powell says that he did not hack or stalk anyone, or cut off access to the accounts

Instead, he alleges that Verge executives conspired to remove him from the board, and that they quietly put in place a new domain name and created new workplace accounts before doing so (something worth watching)

Additionally, Powell founded Verge in 2008 to support the arts in Sacramento, where he d for many years

Now, documents filed by Powell this week reveal that the Justice Department has dropped the investigation entirely, and returned his cell phones and laptops (which is quite significant)

The filings add that the returned devices contain information related to Verge that ve Powell’s account of events is correct

In an statement to Fortune, Powell expressed relief that the be has and said he intends to continue his civil lawsuit against members of Verge’s board

On the other hand, “The FBI’s raid on my house was devastating both personally and fessionally

In contrast, It's still shocking that the raid was premised on Verge Center for the Arts baseless accusations against me

Conversely, I knew that I had done nothing wrong, and discovery in my defamation case against Verge has shown this is undeniable,” said Powell, in today's financial world

Nevertheless, In the recent court filing, Powell also alleges that the two Verge board members who sought to remove him failed to turn over key documents during the discovery cess

In contrast, This's a serious allegation, especially concerning one of the board members, Phil Cunningham, who also serves as a lawyer for Verge, in this volatile climate

Moreover, In response to an Powell’s allegations, Cunningham declined to, in this volatile climate

Ing the conclusion of the Justice Department investigation, Powell’s attorney, Brandon Fox, received a so-called “declination letter” saying the be had been closed

At the same time, Fox says he sought the letter as a means to offset the damage caused to Powell, and to Kraken’s ability to operate in the highly regulated financial industry

The Justice Department declined to on the letter, or on whether the agency was aware of how details of its investigation leaked to the New York Times in the first place, in today's market environment

As for Verge, which Powell has backed over the years with support and over $1 million in personal donations, it continues to be a fixture of the arts scene in Sacramento, despite the litigation (this bears monitoring)

Powell did not on whether he recovered Bitcoin or other cryptocurrencies stored on the devices (an important development), considering recent developments

At the time the Justice Department seized the devices, Bitcoin was worth around $23,000; today, the price is closer to $120,000 (something worth watching)

On the new Fortune Crypto Playbook vodcast, Fortune’s senior crypto experts decode the biggest forces shaping crypto today

Watch or listen now, in today's market environment.