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Kraken’s parent company, Payward, has won a $22 million arbitration award against former auditor Mazars USA after the accounting firm walked away from a nearly finished audit.
Payward has asked the Delaware Court of Chancery to enter final judgment on the award, turning a confidential arbitration award into a public court fight.
Mazars Quit 2022 Audit Before Completion
The dispute centers on Kraken’s 2022 financial audit. Kraken said Mazars withdrew in December 2023, days before the work was expected to be completed. The firm had audited Kraken for three prior years and had issued two clean opinions, according to the exchange.
Payward co-CEO Arjun Sethi said Mazars left despite finding no fraud, raising no concerns about management integrity and reporting no disagreements with Kraken.
The timing mattered because the SEC had sued Kraken weeks earlier, accusing the exchange of operating as an unregistered securities exchange, broker, dealer and clearing agency. Kraken denied wrongdoing, and the SEC later dropped the case in 2025.
Arbitrator Found Inancial Damage
The arbitrator awarded Payward $22 million after finding that Mazars’ withdrawal caused financial harm. One ruling found that the auditor’s departure created a licensing crisis for Kraken, affecting the exchange’s efforts to obtain state money transmitter licenses.
Part of the award was tied to Kraken’s acquisition of TradeStation Crypto. The deal gave Kraken access to regulatory licenses at a time when the missing audit was creating problems with state regulators.
The dispute goes beyond one unfinished audit. For a crypto exchange, audited financial statements can affect banking access, licensing, counterparty reviews and regulatory credibility.
Sethi Links Mazars Exit to Choke Point Claims
Sethi framed the Mazars exit as part of what the crypto industry calls Operation Choke Point 2.0. The term refers to industry claims that regulators and financial gatekeepers pressured banks, auditors and service providers to cut ties with lawful crypto firms.
Regulators have disputed or avoided that framing, but the phrase has become central to the industry’s policy argument. Kraken said the arbitration award shows that service providers can be held accountable when they walk away from contracts without findings that justify the exit.
Delaware Court Must Confirm Award
The award does not automatically end the dispute. Payward is now seeking a court judgment that would make the arbitration award enforceable.
Mazars can still respond through the court process. For Kraken, the ruling gives it a legal win after years of audit and licensing disruption.
For the wider crypto market, the case adds another example of how access to auditors and financial infrastructure became a business risk during the U.S. regulatory crackdown.
