Crypto Exchange Kraken Secures $22M Arbitration Victory Over Mazars Audit Firm
Payward, Kraken's parent entity, claims that Mazars' sudden abandonment of its 2022 financial audit resulted in significant financial losses and links the incident to Operation Chokepoint 2.0.
Kraken's parent entity, Payward, has secured a $22 million arbitration judgment against its previous auditing firm Mazars USA and has petitioned the Delaware Court of Chancery to formalize the award through a court judgment, based on a letter made public Tuesday by Arjun Sethi, who serves as co-CEO.
According to Payward, Mazars pulled out of the cryptocurrency exchange's 2022 audit that was nearing completion, even though the firm had not discovered any fraudulent activity, had not raised any red flags regarding management's credibility, and had expressed no points of contention with the organization.
"An audit is not a favor. It is oxygen," wrote Sethi, emphasizing that independent financial audits are critical for securing banking relationships, regulatory licenses, and various other essential business partnerships.
According to Sethi, the resignation by Mazars represented a component of what he characterized as Operation Chokepoint 2.0, an extensive effort that applied pressure on financial institutions, accounting firms, and other service providers to sever relationships with legitimate cryptocurrency businesses.
The communication referenced multiple regulatory actions from 2023 as supporting evidence for this assertion. Among these were coordinated guidance issued by US banking oversight agencies, the Securities and Exchange Commission's Staff Accounting Bulletin No. 121 which has since been withdrawn, and the failure of cryptocurrency-oriented banking networks including Silvergate SEN and Signature's Signet platform.
Sethi additionally urged Congress to approve the CLARITY Act, contending that an all-encompassing market structure framework would establish more transparent regulations for digital asset enterprises and diminish dependence on enforcement-driven regulatory approaches.
Kraken executives reflect on auditor dispute
On Tuesday, Kraken's co-CEO Dave Ripley stated on X that "this story is worth surfacing despite its PTSD-inducing nature," further noting that "only a fraction of the stories from that era have ever been told."
According to Ripley, the $22 million arbitration judgment represents restitution for economic damages resulting from what he characterized as an orchestrated effort targeting the cryptocurrency sector.
At the same time, regulatory authorities in the United States are continuing to tackle issues surrounding crypto-related debanking practices. During February, the Federal Reserve requested public commentary on a proposed measure to officially eliminate "reputation risk" from banking oversight procedures, subsequent to its 2025 instruction to discontinue pressuring financial institutions to terminate customer accounts based on reputational considerations. Detractors suggested the action might facilitate the conclusion of Operation Chokepoint 2.0.
Established in 2011, Kraken has been broadly anticipated to move forward with an initial public offering. During November 2025, the organization announced it had privately filed a preliminary Form S-1 registration statement with the US Securities and Exchange Commission.
Nevertheless, reports emerged in May suggesting that its public market launch might be postponed until 2027, attributed to less favorable cryptocurrency market dynamics and the platform's continuing initiatives to reduce operational expenses.