Kraken Wins $22 Million Arbitration Award Against Mazars
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TL;DR
- Kraken's parent, Payward, won a $22 million arbitration award against Mazars.
- The dispute stemmed from Mazars' withdrawal from Kraken's 2022 audit.
- Kraken linked the issue to broader industry pressure described as Operation Chokepoint 2.0.
- Kraken seeks judgment from the Delaware Court of Chancery to enforce the award.
Overview
Kraken's parent company, Payward, has won a $22 million arbitration award against its former auditor, Mazars USA. The dispute centered on Mazars' withdrawal from Kraken's nearly completed 2022 audit, which Payward alleges caused significant financial harm and disrupted business operations.
What Happened
Payward claims Mazars quit the 2022 audit process without identifying fraud, management concerns, or disagreements with Kraken.
As a result, Payward brought the matter to arbitration, where it was awarded $22 million in damages.
Kraken's co-CEO, Arjun Sethi, publicly linked Mazars' withdrawal to a broader campaign referred to as 'Operation Chokepoint 2.0' that allegedly pressured financial institutions to cut ties with crypto firms.
After securing the arbitration award, Payward has now asked the Delaware Court of Chancery to enter judgment on the ruling.
Context
Operation Chokepoint 2.0 refers to what some in the crypto industry describe as regulatory and banking pressure aimed at separating legitimate crypto companies from essential financial services and partnerships.
The report references several regulatory actions in 2023, including U.S. banking guidance and the collapse of crypto-focused banking networks, as context for the dispute.
Why It Matters
- The dispute highlights the importance of reliable audit services for crypto companies seeking to maintain banking relationships and regulatory compliance.
- The decision may influence auditor relationships and risk assessments in the crypto sector.
Sources
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Kraken wins $22M arbitration against former auditor Mazars
cointelegraph.com