Overview
- An arbitrator awarded Payward Inc. $22 million after finding Mazars USA abandoned Kraken’s nearly finished 2022 audit, and Payward asked the Delaware Court of Chancery to enter final judgment on the award in a filing Tuesday.
- Arbitration records and Kraken executives say Mazars quit the engagement days before it was complete in December 2023 despite reporting no fraud, no management disagreements, and no integrity concerns.
- About $12.5 million of the award compensated costs tied to Kraken’s purchase of TradeStation Crypto, and Kraken says the broken audit forced years of legal work and millions of dollars to secure new auditors, banking relationships, and state licenses.
- Kraken leaders blame regulatory pressure on banks and service firms—a narrative called Operation Chokepoint 2.0—and pointed out that the SEC’s 2023 complaint referenced by Mazars was dismissed with prejudice in March 2025.
- The public enforcement filing could set a precedent that strengthens contractual accountability for auditors, influences auditor risk decisions, and alters how crypto firms seek banking and licensing access going forward.