Kraken’s parent company, Payward, has won a $22 million arbitration award against its former auditor, Mazars USA. The auditor had walked away from a nearly finished audit, causing reputational harm to Kraken at the height of Operation Choke Point 2.0. Payward is now asking the Delaware Court of Chancery to enter final judgment on the award.
Background on Audit
Mazars had audited Kraken’s financials for three years and delivered two clean opinions before quitting the third audit days before completion in December 2023. The firm confirmed in writing that it had no disagreement with management, no concerns about the company’s integrity, and had found no fraud.
Operation Choke Point 2.0
Operation Choke Point 2.0 refers to the Biden administration’s unofficial campaign to pressure banks into cutting off the crypto industry after the collapse of FTX. The campaign included a joint statement from the Federal Reserve, FDIC, and OCC warning banks about the risks of crypto, as well as FDIC “pause letters” telling lenders to halt or hold off on crypto activity.
Call for Regulatory Clarity
Kraken co-CEO Arjun Sethi used the award to push for the Clarity Act, a crypto market structure bill that would divide oversight of digital assets between the SEC and the CFTC. The bill has cleared the Senate Banking Committee but still needs a full Senate vote and reconciliation with a companion measure before it could reach the president’s desk.
Based on reporting from crypto.news.
