Payward is now asking the Delaware Court of Chancery to enter final judgment on the award, in an open letter from co-CEO Arjun Sethi that doubled as a call to overhaul U.S. crypto rules. The company sued Mazars for abandoning the audit, which Sethi said caused reputational harm at the height of the so-called Operation Choke Point 2.0.
It's been a while since we talked about Chokepoint 2.0.
"An audit is not a favor. It is oxygen," Sethi wrote, arguing that banking relationships, licenses and regulators all depend on one. When an auditor walks away without any findings, he said, the client is left repairing reputational damage it never earned, at a cost of years and millions in legal fees.
The abortive auditMazars had audited Kraken's financials for three years and delivered two clean opinions, Sethi said, before quitting the third audit days before completion in December 2023. He said the firm confirmed in writing that it had no disagreement with management, no concerns about the company's integrity, and had found no fraud.
According to Sethi, Mazars pointed to legal uncertainty when it withdrew, including a complaint the SEC had filed against Kraken weeks earlier. The co-CEO claimed that the auditor had in fact been pressured to abandon an industry that had become politically costly to serve, noting that Mazars Group had halted its proof-of-reserves work for the entire crypto sector in December 2022.
Operation Choke Point 2.0 The SEC vs Kraken A call for ClaritySethi used the letter to push for the Clarity Act, the crypto market structure bill that would divide oversight of digital assets between the SEC and the CFTC. He argued that proving a lawful crypto business deserves ordinary banking and professional services should never require winning a legal fight.
