Two years back, the FBI made headlines when they raided Jesse Powell’s home, the founder of Kraken, as part of a broader crackdown on the cryptocurrency sector. What many didn’t know is that the raid was sparked by a feud with an arts non-profit that Powell had actually set up. Recently, the U.S. Justice Department wrapped up their investigation and gave back dozens of laptops and phones they had taken from Powell’s residence. But the reasons behind their aggressive actions and how the media got wind of the raid remain questions worth pondering.
Jesse Powell is no stranger to the crypto world. Besides launching Kraken, an early player in the cryptocurrency exchange market preparing for its public debut, he’s made a reputation for himself by voicing strong political viewpoints on platforms like Twitter. In mid-2022, the New York Times published a critical profile on him, where he pushed back on progressive ideas during a conversation with his team regarding pronouns and gender identity.
Fast forward to 2023, and the Times reported on the FBI’s search of Powell’s home, amidst accusations that he had done something as serious as hacking and stalking the very non-profit, Verge, he had created.
However, when looking closer, things weren’t as severe as they seemed. Legal documents related to a civil lawsuit filed by Powell against Verge clarified that the contention was about control over some tech accounts including Slack and Google. In the case, Powell firmly states he didn’t hack or harass anyone and that the access interruptions to those accounts weren’t his doing. Instead, he claims that Verge’s leaders plotted to sideline him and set up new digital accounts while leaving him out of the loop.
Powell originally founded Verge in 2008 to nurture the arts scene in Sacramento, where he called home for many years. Now, fresh court documents show that the Justice Department has completely dismissed their investigation and returned his seized items, which Powell believes had details supporting his side.
When he spoke to Fortune, Powell shared he felt relieved to see the investigation end and expressed his intent to keep fighting legally against some of Verge’s board members.
“The FBI raid was a huge personal and professional blow. I’m still astonished that it was initiated based on unjust claims from Verge Center for the Arts against me. I knew I was innocent, and the evidence gathered in my defamation claim against Verge clearly backs that up,” Powell noted.
He has also accused two Verge board members of withholding critical information during the disclosure stage of the lawsuit—an accusation that weighs heavily considering that one board member, Phil Cunningham, also happens to be Verge’s legal advisor.
While Cunningham did not respond to inquiries regarding Powell’s accusations, it’s clear that tension persists. After the Justice Department’s investigation wrapped up, Powell’s attorney, Brandon Fox, received a “declination letter” confirming the probe’s closure. Fox wanted this letter to aid Powell in recovering from the negative impact on his reputation and on Kraken’s operations within the tightly watched financial landscape.
As for whether the Justice Department intends to shed light on the leakage of information to the New York Times, they opted out of making any statements regarding that or the letter received by Powell.
Verge remains a beloved part of Sacramento’s arts scene, back all these years with Powell’s tech support and over a million dollars in donations, even amid ongoing lawsuits. It’s also worth noting that while Powell did not comment on recovering his crypto on the seized devices, Bitcoin was worth around $23,000 at the time they were confiscated, and now it’s skyrocketed to close to $120,000.
This news originally appeared on Fortune.com
