Overview
- Payward, Kraken’s parent company, filed suit on Thursday accusing PowerTrade and its co‑founders of misappropriating about $7.2 million by retroactively altering roughly 100 settled trades to turn a $7 million positive balance into a near $2 million deficit.
- The complaint says PowerTrade carried out unauthorized 'corrections' that canceled or changed trades that had already closed or settled and then attempted to seize Kraken’s bitcoin collateral tied to the artificially created debt.
- Payward obtained an interim worldwide freezing order from the Dubai International Financial Centre courts to stop transfers and has applied to a U.S. federal court for discovery from U.S. banks to locate and freeze additional assets.
- This lawsuit follows Payward’s May amended complaint against custodian Etana for more than $25 million, showing an aggressive, multi‑jurisdictional effort to recover funds it says were mishandled.
- The case raises sharper questions about counterparty risk for institutional derivatives and settlement tools such as ClearLoop, and it could prompt closer scrutiny of settlement and custody practices if courts allow broad cross‑border discovery and enforcement.