Kraken parent firm Payward pursues legal action after $22M Mazars ‘vindication’

Payward, the parent company of crypto exchange Kraken, has asked the Delaware Court of Chancery to enter final judgment against Mazars USA, moving to collect a $22 million arbitration award it won against the accounting firm that quit its audit in late 2023.

A confidential arbitration, decided by a retired judge, produced the award. Kraken now asks the court to make that award enforceable.

The dispute began in December 2023 when Mazars audited Kraken’s financial statements for three years and signed two clean opinions. The third audit, covering 2022, was days from completion when Mazars backed out.

Mazars explicitly stated, in writing, that it had no disagreement with Kraken’s management, no doubts about the company’s integrity, and had found no fraud. Mazars tied its exit to legal risk, pointing to an SEC enforcement action filed against Kraken weeks before, precisely in November 2023.

The SEC has since dropped the case in March 2025. Doing so with prejudice, but with no penalties and no admission of wrongdoing. Sethi argues that Mazars’ resignation was unnecessary and a knee-jerk reaction to a routine legal development that auditors normally handle through disclosure.

What did the arbitrator find?

The retired judge who heard the case treated the case as a stalemate, with both sides erring. He wrote that Mazars deserved credit for its honesty; nonetheless, the firm still owed Kraken millions. He also noted that Kraken’s own books were behind:

“Kraken was in its early years of operation but was rapidly growing into a major player in the cryptocurrency world. Unfortunately, its accounting procedures and automation were lagging behind,” he wrote.

Mazars’ withdrawal created “a licensing crisis” for Kraken, complicating its push to obtain state money transmitter licenses.

Of the $22 million, the arbitrator connected $12.5 million to Kraken’s purchase of TradeStation Crypto, an investment platform that 2024 reports claim was acquired partly for its regulatory licenses.

Court filings also show that the audit was part of a legal storm brewing around the time. Mazars received subpoenas from a grand jury and from the SEC for its Kraken files, and the SEC’s complaint appeared to quote from the Kraken’s audit workpapers.

Sethi believes this is more than just a payout

In his blog post, Sethi cast the case as part of a wider and coordinated effort to fight crypto ventures rather than an isolated contract fight. He tied Mazars’ departure from Kraken’s audit to Mazars Group’s decision to drop proof-of-reserves work across the sector.

That suspension happened in December 2022, when the firm pulled attestations for Binance, Crypto.com, and KuCoin from its website following the collapse of FTX.

Sethi also made reference to the January 3, 2023, joint statement from the Federal Reserve, FDIC, and OCC warning banks about crypto risk, the later-rescinded SAB 121 accounting guidance, and the collapse of Silvergate and Signature Bank. He stated how he was personally debanked by Silicon Valley Bank and First Republic, with both banks later failing.

He called on Congress to pass the CLARITY Act and set permanent market-structure regulation, arguing the US trails the European Union’s MiCA framework.

Forvis Mazars, the firm’s current name and the 10th-largest US accounting firm with about $2.2 billion in revenue, did not immediately respond to a request for comment, according to Business Insider.

What to watch next is whether the Delaware Court of Chancery converts the arbitration award into an enforceable judgment.