• FBI ended Jesse Powell’s probe and returned seized devices linked to the Verge nonprofit dispute.
• DOJ confirms no charges against Kraken founder after two-year investigation concludes.
• Powell alleges that the Verge board withheld key evidence, and the civil defamation case is still ongoing.

The U.S. Justice Department has officially dropped its criminal investigation into Jesse Powell, founder of crypto exchange Kraken, and returned seizure of Powell’s electronic devices that were being investigated. Without charges, the case involving the accusation of cyberstalking and hacking into one of the nonprofits co-founded by Powell was dismissed.

The U.S. Department of Justice sent a formal “declination letter” to Powell’s legal team, confirming the closure of the probe. FBI agents had raided Powell’s Los Angeles home in 2022, seizing dozens of laptops and phones during an inquiry into claims made by Verge Center for the Arts, an arts nonprofit Powell established in 2008.

The investigation, which began in 2021, was unrelated to Powell’s role at Kraken or the crypto industry. However, Kraken has also resolved several cases with U.S. regulators over the last two years. This includes fines imposed for violating sanctions and securities laws.

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Kraken Co-Founder’s Civil Dispute with Nonprofit Sparked Allegations

The lawsuits focused on a boardroom battle at Verge. The nonprofit’s leadership accused Powell of blocking access to communication tools like Google Workspace and Slack. Powell denied the claims and filed a civil lawsuit in California state court alleging that members of the Verge board had arranged a plan to remove him and take control of the organization’s digital infrastructure.

In addition, Powell has provided documents showing that Verge officials had created additional accounts and a separate domain in secret to lock him out from the internal systems. He also alleged that two of the board members, one of whom is also the law firm that represents Verge, had denied him access to key documents. Powell, in his statement, noted that the federal raid caused severe professional and personal harm.

The returned devices reportedly contained emails and memos supporting Powell’s version of events. However, Powell has not stated whether Bitcoin or other digital assets stored on the seized devices were recovered.

According to his legal representative, Brandon Fox, the declination letter would help reduce reputational loss, particularly in a highly regulated industry such as crypto. Although he was cleared of wrongdoing, his attorneys state that the case’s exposure also harmed Kraken’s business operations. 

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