- Payward, parent of crypto exchange Kraken, won a $22 million arbitration award against former auditor Mazars USA and seeks judgment in Delaware court.
- Mazars quit Kraken’s nearly completed 2022 audit despite finding no fraud or management integrity concerns, according to co-CEO Arjun Sethi.
- Sethi described the resignation as part of Operation Chokepoint 2.0 and called on Congress to pass the CLARITY Act for clearer digital asset rules.
Payward, the parent company of crypto exchange Kraken, has won a $22 million arbitration award against former auditor Mazars USA and asked the Delaware Court of Chancery to enter judgment on the award, according to a letter published Tuesday by co-CEO Arjun Sethi. Payward said Mazars withdrew from the exchange’s nearly completed 2022 audit despite finding no fraud, raising no concerns about management’s integrity, and reporting no disagreements with the company.
“An audit is not a favor. It is oxygen,” Sethi wrote, arguing independent audits are essential for banking services, licenses, and business relationships. Sethi said Mazars‘ resignation was part of what he described as Operation Chokepoint 2.0, a campaign pressuring banks and auditors to cut ties with lawful crypto companies.
The letter cited 2023 regulatory developments including joint banking guidance and the SEC’s Staff Accounting Bulletin No. 121 as evidence. Sethi also called on Congress to pass the CLARITY Act, arguing a comprehensive market structure framework would reduce reliance on regulatory enforcement.
Kraken co-CEO Dave Ripley said on X Tuesday that “this story is worth surfacing despite its PTSD-inducing nature.” Ripley described the $22 million award as compensation for financial harm from a coordinated campaign against the crypto industry.
Meanwhile, the Federal Reserve sought public feedback in February on a proposal to remove “reputation risk” from bank supervision. Kraken was reported in May that its public debut may not come until 2027, citing weaker market conditions and cost-cutting efforts.
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