U.S. authorities have concluded their investigation into the founder of Kraken, Jesse Powell, and returned a large amount of computers and phones seized during a raid earlier this year, according to Fortune on 22 July.
According to Fortune, Powell's attorneys received the waiver letter from the Justice Department on Tuesday and more than three dozen seized laptops and phones. The federal investigation into Powell had nothing to do with Kraken, his cryptocurrency platform, but instead focused on his other passion: the Verge Center for the Arts, a non-profit organisation based in Sacramento, California, which Powell founded in 2008.
After he was removed from the Verge's board of directors, some members of the group came into conflict with him, and Powell has since been embroiled in a lengthy legal and governance battle for control of the organisation.
A New York Times article earlier this year had reported that Powell was under investigation for alleged acts of 'hacking and cyber-stalking' against the non-profit, but Powell has always maintained that the allegations were exaggerated.
The crux of the matter, which is also at the heart of a lawsuit Powell filed against some of his former colleagues, concerns access to the organisation's Slack and Google Workspace accounts, which Powell controlled and for which he was the only one with the passwords.
"I'm very relieved that this is over. It never made sense, like the Rstormsf process. It's amazing how quickly your life can be turned upside down. I am grateful to those who saw through it and to my amazing legal team. Now, I'm back to focusing on KrakenFX," announced Powell.
Very glad to have this behind me. It never made sense but neither does the @rstormsf trial. Wild how quickly you can have your life upended. I'm grateful for those who saw through it and for my stellar legal team. Now, turning my attention back to @@krakenfx. 🐙🚀 https://t.co/LbaDxN0bCl
- Jesse Powell (@jespow) July 22, 2025
Powell denied blocking anyone's account access, instead claiming that some Verge executives created a new domain and new Slack and Discord accounts without his knowledge, as part of a "coup" to oust him.
Powell has filed a lawsuit in California state court against his former Verge colleagues, accusing them of defamation and wrongful removal from his position in the organisation.
In documents filed this week, Powell's attorneys included a copy of a cease-and-desist letter from federal prosecutors, in which the Justice Department says it does not intend to proceed with the prosecution. Powell's lawyer wrote in the documents that this letter will help counter reputational damage caused by the raid and prove to banks and regulators that Kraken executives are not under federal investigation.
Powell described the 2023 raid as "devastating" on a personal level and "deeply disruptive" to Kraken on a professional level, but said in the legal documents that much of the information requested during discovery of the lawsuit has already proven unfounded.
Powell also claimed that two Verge board members, including lawyer Phil Cunningham, are obstructing the discovery process by refusing to hand over the requested documents.
The Department of Justice has recused itself from the case, but the question remains as to how The New York Times learned of the investigation, as no one has come forward. Neither the FBI nor the Department of Justice have publicly commented on the matter.
The Verge continues to be an influential player in Sacramento's arts and culture scene, with over $1 million raised in donations over time, and Powell has provided technical assistance to the organisation on several occasions.
Bitcoin (BTC), which was trading at around $23,000 when Powell's devices were seized last year, has risen sharply in value and, at the time of writing, is trading at nearly $119,000. Powell did not specify whether the returned devices included cryptocurrencies.
