Kraken’s parent company, Payward, has secured a $22 million arbitration award against former auditor Mazars USA, with co-CEO Arjun Sethi directly linking the dispute to the controversial Operation Chokepoint 2.0 — a term used to describe alleged coordinated pressure on banks and service providers to cut ties with crypto firms.
The dispute stems from Mazars’ abrupt withdrawal from a nearly completed 2022 audit of Kraken, a move Sethi says caused significant financial and reputational damage. In a letter published on Tuesday, he confirmed that Payward has asked the Delaware Court of Chancery to enter judgment on the award. Mazars ended the engagement even though it had found no fraud, raised no management concerns, and reported no disagreements with Kraken, according to Sethi.
“An audit is not a favor. It is oxygen,” Sethi wrote, emphasizing that banking relationships, licenses, and regulatory access all depend on completed independent audits. He argued that lawful crypto firms were denied basic financial services during the period, pointing to a January 2023 joint letter from the Federal Reserve, FDIC, and OCC that raised soundness concerns for banks working with crypto, as well as at least 25 FDIC letters instructing banks to pause crypto-related activity. The SEC’s since-rescinded Staff Accounting Bulletin No. 121 and the collapse of Silvergate’s SEN and Signature’s Signet payment systems were also cited as evidence of the pressure campaign.
Kraken co-CEO Dave Ripley described the award as compensation for harm from a “coordinated campaign against the crypto industry,” and Sethi called on Congress to pass the CLARITY Act, which would establish clear regulatory boundaries for the SEC and CFTC over digital assets. “Vindication is not the point,” he said. “The point is that no founder… should ever need to win an arbitration to prove they deserved a bank account.”
Beyond the legal victory, Kraken continues to expand its product suite. It recently enabled eligible non-U.S. users to use tokenized stocks and ETFs as collateral for futures and margin trading, launched a tokenized money market partnership with Franklin Templeton, and introduced an institutional crypto lending structure with Maple. The company, which confidentially filed for an IPO in November 2025, may see its public listing delayed until 2027 due to weaker market conditions.
