- Payward seeks Delaware court approval of its $22 million arbitration award.
- Kraken says Mazars exited its audit despite finding no fraud or disagreements.
- The case renews debate over Operation Choke Point 2.0 and crypto regulation.
The Kraken Mazars Lawsuit has entered a new stage after Payward, the parent company of Kraken, asked the Delaware Court of Chancery to confirm a $22 million arbitration award against former auditor Mazars USA. According to a blog post published Tuesday, the exchange said Mazars withdrew from its nearly completed 2022 audit despite finding no fraud or disagreements with management. Kraken argues the decision caused substantial financial and reputational damage, making the Kraken Mazars Lawsuit a significant case for the digital asset industry.
Kraken co-CEO Arjun Sethi described independent audits as essential infrastructure for financial firms, saying they are critical for maintaining banking relationships, regulatory approvals, and counterparty confidence.
Kraken Mazars Lawsuit Focuses on Audit Withdrawal
According to Kraken, Mazars had previously issued clean audit opinions for the exchange before ending the 2022 engagement shortly before completion. Sethi stated that the auditor confirmed it had no concerns regarding management integrity or financial reporting.
Kraken said replacing the audit required years of work and millions of dollars in legal and compliance expenses. The Kraken Mazars Lawsuit follows an arbitration ruling awarding Payward $22 million, which the company now wants formally recognized by the Delaware Court of Chancery.
Kraken Mazars Lawsuit Renews Regulatory Pressure Debate
The Kraken Mazars Lawsuit also highlights concerns surrounding Operation Choke Point 2.0, a term used by parts of the crypto industry to describe alleged regulatory pressure on banks, auditors, and financial service providers.
Sethi pointed to measures including the SEC’s now-rescinded SAB 121 guidance, banking restrictions, and disruptions following the collapse of Silvergate and Signature Bank payment networks.
Kraken CEO Dave Ripley said the arbitration award reflects only part of the financial harm the company experienced during that period. Sethi also urged Congress to advance the CLARITY Act, arguing that comprehensive digital asset legislation would provide clearer regulatory standards instead of relying primarily on enforcement actions.
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