Payward, Kraken’s parent company, has asked the Delaware Court of Chancery to enter final judgment against Mazars USA after winning a $22 million arbitration award. Co-CEO Arjun Sethi framed the case as part of a broader fight over debanking, regulatory pressure and the need for clear U.S. crypto market rules.
Key Takeaways
Payward won a $22M award and asked Delaware court to enter judgment against Mazars USA.Kraken says Mazars’ exit reflected 2023 crypto regulatory pressure and debanking concerns.Arjun Sethi urged Congress to pass the CLARITY Act for clearer U.S. crypto rules.The dispute stems from Mazars’ decision to withdraw from Kraken’s nearly completed 2022 audit in December 2023. According to Payward Co-CEO Arjun Sethi, Mazars had audited Kraken for three years, issued two clean opinions, and was days away from completing a third.
Sethi said the auditor confirmed in writing that it did not disagree with Kraken’s management, had no concerns about the company’s integrity, and had no findings of fraud.
Mazars cited legal uncertainty, including a recent Securities and Exchange Commission (SEC) complaint against Kraken. That case was later dismissed with prejudice, with no penalties, no admission of wrongdoing and no required changes to Kraken’s business.
Kraken Links Mazars Exit to Regulatory Pressure“I will say what I believe plainly: Mazars was pressured,” Sethi wrote.
Sethi also referenced the SEC’s SAB 121 accounting guidance, the Federal Reserve’s denial of Custodia’s master account and the shutdown of Silvergate’s SEN and Signature’s Signet settlement networks.
Sethi Calls for CLARITY ActMuch of that regulatory posture has since been reversed. SAB 121 was rescinded, the banking regulators withdrew their joint statement, and congressional investigations found that regulators used vague rules and informal pressure to steer banks away from digital asset firms.
Sethi said the damage was not limited to companies. He described being personally debanked and said portfolio companies at Tribe Capital lost banking relationships despite doing nothing wrong.
The blogpost ends with a call for Congress to pass the CLARITY Act, which would create federal market-structure rules for digital assets and clarify oversight between regulators.
“We won this fight,” Sethi wrote. “Now, our congressional leaders from both sides of the aisle need to come together to finish the bigger one. Pass the CLARITY Act.”
