Payward Inc., the parent company of cryptocurrency exchange Kraken, has prevailed in arbitration against its former auditor, Mazars USA, receiving a $22 million award after the firm unexpectedly pulled out of a nearly completed financial review.
The decision marks a notable legal victory for the crypto platform amid ongoing industry discussions about regulatory and institutional pressures on digital asset businesses.
According to a detailed public statement from Kraken co-CEO Arjun Sethi, Mazars had served as Kraken’s auditor for three straight years. The first two audits resulted in clean opinions with no issues raised.
The process for the 2022 financial statements was far advanced by December 2023, and the firm had signaled expectations of another positive outcome. Instead, Mazars withdrew just days before completion.
In written communications at the time of resignation, Mazars explicitly stated there were no disagreements with Kraken’s management, no concerns about executive integrity, and no indications of fraud.
The firm cited general uncertainties tied to legal developments, including a US Securities and Exchange Commission (SEC) complaint filed against Kraken shortly beforehand.
That regulatory action was later dismissed with prejudice, resulting in no penalties or admissions of wrongdoing.
Kraken viewed the sudden exit as highly disruptive.
Audited financial statements serve as essential documentation for banking partnerships, regulatory licenses, counterparty relationships, and overall operational credibility.
Losing an auditor mid-process created immediate complications and required significant time and resources to resolve through new audits and related legal efforts.
Kraken has since obtained clean audits from other providers in following years.
Sethi connected the episode to what he described as broader coordinated pressures on the cryptocurrency sector during 2022 and 2023.
He referenced Mazars Group’s earlier industry-wide decision in December 2022 to halt proof-of-reserves attestation services and remove related reports from its site.
He also pointed to regulatory actions such as joint statements from banking agencies highlighting risks in crypto business models, letters sent to financial institutions, accounting guidance affecting custody arrangements, and the rapid shutdown of key settlement networks used by crypto firms.
These developments, critics argue, created an environment where professional service providers faced strong incentives to distance themselves from digital asset companies, regardless of individual client compliance.
The arbitration outcome has now moved into public view. Payward has asked the Delaware Court of Chancery to enter a final judgment confirming the $22 million award against Mazars USA (now operating as Forvis Mazars).
This step converts the confidential arbitration result into an enforceable court order.
Beyond the immediate financial award, the case underscores challenges crypto companies encountered when essential service providers stepped away amid heightened scrutiny.
Sethi noted personal and company-level impacts, including difficulties securing banking relationships and increased regulatory examinations that ultimately found no violations.
He dedicated the victory in part to Kraken founder Jesse Powell, who navigated significant personal and professional pressures during this period.
The development comes as efforts continue to establish clearer rules for digital assets in the United States.
Sethi called for legislative action, including passage of market structure bills, to provide stable frameworks that support innovation while addressing legitimate oversight needs.
Similar regulatory clarity has already advanced in other jurisdictions, such as Europe’s MiCA framework.
This arbitration success provides Kraken with both financial compensation and a public record affirming that the auditor’s withdrawal occurred without any findings of misconduct by the company. It also contributes to wider conversations about accountability for professional firms that serve innovative industries during periods of regulatory uncertainty.
