Kraken wins $22M arbitration against auditor Mazars

Payward, the parent company of crypto exchange Kraken, won a $22 million arbitration award against former auditor Mazars USA and asked the Delaware Court of Chancery to convert the award into a court judgment to allow enforcement.

Payward says Mazars resigned from Kraken’s nearly completed 2022 audit even though the firm reported no evidence of fraud, raised no integrity concerns and recorded no disagreements with the company. The filing to the Court of Chancery follows the arbitration panel’s award for financial harm Payward attributes to the lost audit access.

Co-CEO Arjun Sethi published a letter describing the audit resignation as harmful to Kraken’s ability to secure banking services, licenses and other business relationships. He wrote, “An audit is not a favor. It is oxygen,” and argued the resignation deprived the company of an independent review relied on by counterparties and regulators.

In the same letter, Sethi characterized the withdrawal as part of what he called Operation Chokepoint 2.0, and pointed to regulatory developments from 2023 as contributing factors. He cited joint guidance from U.S. banking regulators, the Securities and Exchange Commission’s Staff Accounting Bulletin No. 121 (which was later rescinded), and failures at crypto-focused banking networks including Silvergate and Signature’s Signet.

Payward told the court the $22 million award was intended to cover financial consequences from losing audit access at a time when independent audits were required for licensing, banking relationships and other corporate needs. The company maintains the arbitration panel compensated for concrete financial harm resulting from Mazars’ resignation.

Kraken co-CEO Dave Ripley posted on social media that “this story is worth surfacing despite its PTSD-inducing nature,” adding that the arbitration award compensates for financial harm he attributes to coordinated pressure on the crypto industry.

Regulators have pursued actions related to crypto and banking relationships. In February, the Federal Reserve sought public feedback on a proposal to remove “reputation risk” from routine bank supervision, following a 2025 directive instructing examiners not to pressure banks to close customer accounts over reputational concerns.

Kraken, founded in 2011, confidentially submitted a draft Form S-1 registration statement to the U.S. Securities and Exchange Commission in November 2025. Payward has said the timing of a public listing could be affected by broader crypto market conditions and the company’s ongoing cost reductions.

Payward contends the court judgment will help the company recover losses tied to the audit it says was completed and uncontroversial. The company has asked the Delaware court to enter the arbitration award as a judgment so it can pursue enforcement.