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Kraken wants its money. Through its parent company Payward, the exchange has asked the Delaware Court of Chancery to issue a final judgment against Mazars USA, its former auditor — after an arbitrator already awarded it $22 million.
The conflict dates back to December 2023. Mazars withdrew from Kraken’s audit for the 2022 fiscal year, and not just at any time: a few days before the finalization of the file. Three years of auditing, two favorable opinions, and then nothing. According to Kraken, Mazars had even confirmed in writing that it had no disagreements with management, no concerns about the company’s integrity, no discovery of fraud. Mazars, on the other hand, justified its resignation by legal developments — essentially, a complaint filed by the SEC against Kraken. However, this complaint was later dismissed without penalties.
Not really a solid justification, according to Kraken.
Millions Lost Rebuilding Trust
The abandonment of this audit was costly. Kraken claims to have lost years and millions of dollars in legal fees to secure new auditors and reassure banks, regulators, and counterparties. All because an auditor walked away just days from the finish line. Since then, Kraken has obtained favorable audits every year — but the damage was done.
And the timing is not insignificant. In December 2022, a year before Mazars withdrew from the Kraken file, the Mazars group had already stopped its proof of reserves work for the entire crypto sector, removing these reports from its site. A strong signal that the firm wanted to distance itself from the industry.
Arjun Sethi, co-CEO of Kraken, places all this in a broader context. For him, it’s “Operation Chokepoint 2.0” — an expression that describes what some see as a coordinated effort by regulators to cut legal crypto businesses off from traditional banking services. Not a far-fetched theory, incidentally: a House committee concluded that informal pressures had indeed been exerted to steer banks away from players in the digital asset sector.
The numbers are there to prove it. Documents obtained through the Freedom of Information Act showed that the FDIC sent at least 25 letters to two dozen banks, urging them to suspend or avoid expanding their cryptocurrency-related activities. Not official orders. Informal pressures. It changes everything legally, but the effect is the same.
Silvergate, Signature, and the 2023 Banking Squeeze
In March 2023, the payment networks managed by Silvergate and Signature closed within days of each other. Two pillars of crypto transactions disappearing simultaneously. For exchanges and companies in the sector, it was brutal — finding stable banking access became a major headache. The Federal Reserve also denied a master account to Custodia, a Wyoming bank specializing in digital assets. A blow to institutions wanting to operate within the existing regulatory framework while offering crypto services.
Sethi also mentioned the case of Jesse Powell, founder of Kraken. In March 2023, Powell’s home was raided by federal authorities — in connection with a dispute not directly related to Kraken. Two years later, the investigation was closed without charges. Powell has since handed over leadership to Dave Ripley.
Too risky to leave all this without legislative response, according to Kraken.
The company’s letter ends with a direct appeal to Congress: pass the CLARITY Act. The goal of this legislation is to establish market structure rules for digital assets, with shared oversight between the Commodity Futures Trading Commission and the SEC. There would also be specific protections for software developers. The regulatory framework has already shifted — the SEC has rescinded certain guidelines, banking regulators have withdrawn previous statements — but Kraken wants something more solid, more permanent.
Meanwhile, Kraken is pushing on another front. The exchange is seeking to obtain a full banking license in Europe, through Lithuania, to offer traditional banking services in the European Economic Area. Not just crypto — classic financial services. If successful, Kraken would likely be among the first exchanges to secure this type of license.
The final judgment requested in Delaware, the $22 million already awarded by the arbitrator, the battle for a European banking license, and the appeal to Congress — Kraken is playing on multiple fronts at once.
Frequently Asked Questions
Why is Kraken suing Mazars USA?
Mazars withdrew from Kraken’s 2022 audit a few days before its finalization in December 2023. An arbitrator awarded $22 million to Kraken, which is now asking the Delaware Court of Chancery to issue a final judgment.
What is the CLARITY Act that Kraken supports?
The CLARITY Act aims to establish market structure rules for digital assets, with shared oversight between the CFTC and the SEC, and protections for software developers.
What is the connection between Kraken and Operation Chokepoint 2.0?
Arjun Sethi, co-CEO of Kraken, places the company’s banking difficulties in this context: a perceived coordinated effort to cut legal crypto businesses off from banking services, supported by documented informal pressures from the FDIC towards banks.
