Payward, the parent company of cryptocurrency exchange Kraken, has asked the Delaware Court of Chancery to issue a final judgment against its former auditor, Mazars USA, after the arbitrator awarded the company $22 million.
The stock exchange revealed the request on July 7 through an open session letter From Co-CEO Arjun Sethi and a series of Supports From CEO Dave Ripley.
The dispute dates back to December 2023, when Mazars withdrew from Kraken’s 2022 audit days before it was completed. Mazars has reviewed Kraken for the past three years and issued two clean opinions, according to the company.
Sethi said the auditor confirmed in writing that he had no disagreement with management, no concerns about the company’s integrity, and no findings of fraud.
Mazars attributed its resignation to legal developments, including a complaint filed by the Securities and Exchange Commission against Kraken weeks ago.
The SEC’s complaint was dismissed with prejudice, with no sanctions and no admission of wrongdoing. Kraken said the abandoned audit process cost it years and millions of dollars in legal fees to secure new auditors and reassure banks, regulators and counterparties. The exchange said it received a clean audit every subsequent year.
The letters come as kraken He continues A full European banking licence, reportedly via Lithuania, a move that would allow the company to offer traditional banking services across the European Economic Area and potentially become the first cryptocurrency exchange to obtain a full European banking licence, according to CoinDesk Preparing reports.
The effort is part of Kraken’s broader regulatory strategy as it expands beyond cryptocurrencies into mainstream financial services, building on milestones including payment access and licensing from the US Federal Reserve Bank in the UAE.
Operation Chokepoint 2.0
Sethi placed the episode among what critics call it Operation Chokepoint 2.0It is a term that refers to what they describe as a coordinated effort by regulators to cut off legal cryptocurrency companies from banking and other services. In December 2022, a year before the Kraken audit was completed, the Mazars Group to stop Proof of Reserves operates in the cryptocurrency sector and removes those reports from its website.
The letter cited a series of actions from 2022 and 2023. On January 3, 2023, the Federal Reserve, FDIC, and OCC announced Issued A joint statement warns that cryptocurrency business models raise safety and soundness concerns for banks.
Documents released after a Freedom of Information Act lawsuit showed that the FDIC sent at least 25 letters to two dozen banks urging them to pause or refrain from expanding cryptocurrency activity. The SEC’s SAB 121 accounting guidance required public companies that hold cryptocurrencies to record those assets on their balance sheets, a move that made custody uneconomical for banks.
Federal Reserve to reject A key account for Custodia, a bank in Wyoming designed for digital assets. In March 2023, payment networks operated by Silvergate and Signature were shut down within days of each other.
As the era of bank break-ups ends, the Kraken demands rules
Much of this framework It has been undone. Supreme Education Council Cancel SAB 121, banking regulators withdrew the joint statement, and a House committee report concluded that regulators used vague rules and informal pressure to distance banks from fiat digital asset companies.
Sethi also recounted the experience of Kraken founder Jesse Powell, who started the exchange in 2011. In March 2023, federal agents were able to… I raided Powell’s home and devices were seized in connection with a dispute involving a non-profit organization unrelated to the Kraken.
Two years later, the government closed the investigation, returned the devices, and brought no charges. Powell handed over the CEO role to Ripley, and Sethi joined Ripley in leading the company.
The letter concluded by calling on Congress to pass the bill The law of claritywhich would establish market structure rules for digital assets, split oversight between the CFTC and SEC and add protections for software developers.
The House passed the bill in July 2025 by a vote of 294-134, with the support of 78 Democrats and the Senate Banking Committee. advanced I copied it in May.
Sethi compared the US timeline with the European Union, where the MiCA framework has come into effect across member states.
