According to reports from TradingView News, Payward is now seeking Delaware Chancery Court judgment to confirm the $22 million arbitration award against Mazars USA over the firm's withdrawal from Kraken's nearly completed 2022 audit. As reported by TradingView News, parent company Payward has asked the Delaware Court of Chancery to enter judgment on the arbitration award after prevailing against Mazars USA. Co-CEO Arjun Sethi wrote that the dispute caused financial damage to the exchange, with Mazars ending the engagement despite finding no fraud and raising no concerns about Kraken's management. Sethi argued that the decision disrupted access to banking relationships, licensing processes and other essential business services that rely on completed independent audits. The arbitration was confidential until Payward filed to enforce the award in Delaware Court of Chancery on July 7, 2026, making the ruling public for the first time. Following the announcement, the Kraken share price was unavailable due to the company's private holding status.
According to TradingView News, Sethi attributed Mazars' withdrawal to Operation Chokepoint 2.0, a term used by parts of the crypto industry to describe alleged coordinated pressure on banks, auditors and service providers to distance themselves from digital asset companies. As reported by TradingView News, the letter pointed to several regulatory developments during 2023, including joint guidance issued by U.S. banking regulators, the Securities and Exchange Commission's since-rescinded Staff Accounting Bulletin No. 121, and the collapse of crypto-focused banking networks Silvergate SEN and Signature Bank's Signet payment system. Sethi argued that lawful crypto firms were denied access to basic financial services during this period, describing audits as critical infrastructure for financial companies with the statement "an audit is not a favor. It is oxygen." The context included Mazars Group halting proof-of-reserves work for the entire crypto sector in December 2022, a full year before quitting the Kraken audit, and the FDIC sending 25 letters to 24 banks urging them to pause crypto-related activity.
As reported by TradingView News, Sethi is leveraging the dispute to advocate for the CLARITY Act, saying a dedicated crypto market structure law would provide clearer operating rules for digital asset companies instead of relying on enforcement actions. Co-CEO Dave Ripley described the arbitration case as compensation for financial harm that resulted from a coordinated campaign against the crypto industry. Sethi's letter frames this not as a contract dispute but as political capitulation dressed as professional judgment, stating "I will say what I believe plainly: Mazars was pressured." The SEC case that spooked Mazars into walking away was dismissed with prejudice in March 2025 with no penalties and no admission of wrongdoing by Kraken. Meanwhile, U.S. regulators have continued reviewing banking oversight tied to digital assets, with the Federal Reserve requesting public feedback on a proposal to remove 'reputition risk' from bank supervision after its 2025 directive instructing supervisors to stop pressuring banks to close customer accounts over reputational concerns. The dispute comes amid ongoing Senate committee debates impacting U.S. crypto industry infrastructure, with the industry continuing its push for clearer regulatory rules.
According to the latest reports, $12.5 million of the $22 million award was specifically tied to Kraken's acquisition of TradeStation Crypto, a deal that was apparently complicated by the audit vacuum Mazars left behind. The arbitrator agreed that Mazars' departure caused real, quantifiable damage to Payward. The timing of Mazars' exit is particularly significant, as the firm withdrew right after the SEC came knocking at Kraken's door in November 2023, creating what Payward describes as a "licensing crisis" that forced the exchange to spend significant legal resources simply to restore confidence with state regulators and banking partners. The $22 million award is meaningful but probably not in the way you'd expect - it's not going to move Kraken's bottom line in any dramatic fashion, but the real significance is precedent. This is one of the first high-profile cases where a crypto company successfully held an auditor financially accountable for walking away. As reported by TradingView News, Kraken co-CEO Dave Ripley posted on X that the story is "worth surfacing" despite being "PTSD-inducing," arguing that only "a fraction of the stories from that era have ever been told."
The market reaction to the news has been muted so far, with no significant price moves for any Kraken-related assets and no wave of analyst commentary. That's partly because Kraken remains a private company, so there's no publicly traded stock to react. But it's also because the crypto market in mid-2026 has bigger things on its mind than a two-year-old audit dispute, however consequential it may be structurally. However, the crypto industry's audit problem hasn't gone away, and firms still struggle to find willing, qualified auditors. If this arbitration outcome encourages accounting firms to think twice before abandoning crypto clients at the first sign of regulatory heat, it could have a quietly stabilizing effect on the sector's institutional infrastructure. The companies that can reliably complete audits and maintain clean financial reporting will have a meaningful edge in securing banking relationships and state-level licenses, two things that remain genuine chokepoints for crypto businesses operating in the US. As reported by TradingView News, the key factual point is Payward's assertion that the auditor's departure occurred even after Mazars found no fraud and did not flag integrity or reporting concerns, making the arbitration outcome particularly significant.
According to TradingView News, Kraken has continued adding new institutional and trading products despite the legal dispute. The exchange recently began allowing eligible users outside the United States to use selected tokenized stocks and exchange-traded funds as collateral for futures and margin trading on Kraken Pro. The launch covers 10 xStocks assets, including SPYx, QQQx, AAPLx, GOOGLx, TSLAx, NVDAx, HOODx, MSTRx, GLDx and CRCLx. This follows other recent product launches, including a partnership with Franklin Templeton for tokenized money market products and an institutional crypto lending structure with Maple using a bankruptcy-remote vehicle for crypto-backed loans. As reported by TradingView News, while the auditor dispute is a separate development, it fits into the same investor-relevant theme: how traditional finance gatekeepers—auditors, banks, and regulators—can shape the cost of doing business and the path to market participation. If Payward's framing is accurate, arbitration outcomes may serve not only as recovery for past harm but also as leverage in future negotiations with institutional counterparties.
As reported by TradingView News, Kraken has been preparing for a public listing and disclosed in November 2025 that it had confidentially submitted a draft Form S-1 registration statement to the U.S. Securities and Exchange Commission. However, reports published in May indicated the IPO may be delayed until 2027 due to weaker crypto market conditions and ongoing cost-cutting efforts. Founded in 2011, the exchange continues expanding its product suite with tokenized stock collateral and institutional lending services while navigating the regulatory landscape and the ongoing Operation Chokepoint 2.0 allegations. According to TradingView News, the practical question for crypto stakeholders is whether regulatory supervision adjustments translate into measurable improvements in banking access—especially for firms that need auditors, custodians, and intermediaries to operate at scale. The Federal Reserve's proposal to remove 'reputition risk' from bank supervision, following its 2025 directive to stop pressuring banks over reputational concerns, could help bring an end to Operation Chokepoint 2.0. However, analyst Austin Campbell warns that "executive orders are not permanent solutions" and could be overturned by a new president or Congress, potentially exposing the industry to another round of risks.
