Key facts
- Kraken's parent company, Payward, secured a $22 million arbitration award against its former auditor, Mazars USA.
- Payward is seeking final judgment from the Delaware Court of Chancery to enforce the award.
- Mazars USA withdrew from Kraken's audit days before completion in December 2023, despite finding no issues.
- Kraken alleges the auditor's withdrawal caused significant reputational harm and financial damages.
- Kraken executives attribute the auditor's actions to Operation Chokepoint 2.0, a pressure campaign against the crypto industry.
Kraken's parent company, Payward, is pursuing a $22 million arbitration award against its former auditor, Mazars USA, seeking final judgment from the Delaware Court of Chancery. The crypto exchange alleges that Mazars abandoned a nearly completed audit in December 2023 without cause, leading to significant reputational and financial damages.
Payward co-CEO Arjun Sethi stated that Mazars' withdrawal was influenced by legal uncertainty and alleged pressure related to Operation Chokepoint 2.0, a perceived campaign to isolate the crypto industry from essential services. Sethi highlighted that Mazars confirmed no disagreements or concerns about Kraken's integrity before quitting, and used the situation to advocate for the passage of the Clarity Act, a bill aimed at establishing a clearer regulatory framework for digital assets.
Kraken co-CEO Dave Ripley echoed these sentiments, framing the award as compensation for harm inflicted by a coordinated effort against the crypto sector. The company's legal action and public statements come amid broader discussions about 'debunking' and regulatory shifts, with US regulators seeking feedback on reducing 'reputation risk' in bank supervision.