Kraken Parent Hits Mazars With $22M Suit Over 2023 Auditor Exit

Kraken's parent company Payward Inc. is suing former auditor Mazars USA for $22 million, seeking to enforce a confidential arbitration award that blames the accounting firm's late-2023 withdrawal for a licensing crisis. Redacted arbitration rulings show Mazars' departure left Kraken scrambling to find a new auditor while state regulators held up approvals. The award allocated $12.5 million of the damages specifically to Kraken's acquisition of TradeStation Crypto, a deal that required money-transmitter licenses in multiple states.

Kraken said the deal, announced in 2023, stalled as Mazars' exit triggered questions from state regulators about the exchange's audit history. Payward had to reapply with a new auditor, delaying the acquisition and adding legal and compliance costs, according to the redacted filings. The arbitration panel found that Mazars' abrupt pullback directly caused the regulatory holdup, not any deficiency in Kraken's own filings.

Mazars was one of several auditors that pulled back from crypto clients after FTX's collapse in late 2022. The firm had served as Kraken's auditor for years, and its withdrawal forced the exchange to seek a replacement while navigating state-by-state licensing processes. The TradeStation Crypto acquisition, aimed at expanding Kraken's U.S. retail brokerage footprint, required approvals from states including New York, California, and Texas – each of which requested updated audit materials after Mazars stepped away.