TLDR
- Kraken won a $22 million arbitration award against former auditor Mazars USA.
- Payward asked the Delaware Court of Chancery to enter judgment on the award.
- Kraken said Mazars withdrew from its nearly completed 2022 audit without finding fraud.
- Arjun Sethi linked the audit exit to alleged Operation Chokepoint 2.0 pressure.
- Kraken urged Congress to pass the CLARITY Act for clearer digital asset rules.
Kraken secured a $22 million arbitration award against former auditor Mazars USA after a long-running legal dispute. The company asked the Delaware Court of Chancery to recognize and enforce the arbitration decision. Kraken said the auditor abandoned its nearly completed 2022 audit despite finding no fraud or management concerns.
Kraken Wins $22M Award Over Mazars
Kraken stated that Mazars ended the audit engagement without reporting disagreements over financial records or company leadership. The company argued that the withdrawal caused significant financial harm and disrupted important business relationships. The dispute later moved into arbitration, where the panel awarded $22 million to the exchange.
Arjun Sethi described independent audits as essential for regulated businesses and financial access. He wrote, “An audit is not a favor. It is oxygen,” while discussing industry requirements. Kraken also filed a request asking the Delaware Court of Chancery to enter judgment on the arbitration award.
Executives Connect Dispute to Operation Chokepoint 2.0
Kraken executives linked the auditor’s withdrawal to what they described as Operation Chokepoint 2.0. Sethi argued that regulators indirectly pressured banks, auditors, and service providers to distance themselves from crypto businesses. He cited banking guidance, SAB 121, and failed crypto banking networks as supporting examples.
Dave Ripley also addressed the dispute through a public statement on X after the arbitration outcome.
He wrote, “This story is worth surfacing despite its PTSD-inducing nature,” while reflecting on the period.
Kraken said the award compensated financial damage caused by what executives called a coordinated campaign against the crypto industry.
It's been a while since we talked about Chokepoint 2.0.
Kraken will enter a $22M award with the Delaware Court of Chancery — compensation for financial harm inflicted on us by the coordinated campaign to cut crypto off from banking, auditors, and other essential services. pic.twitter.com/gJoJ5ytU07
— Dave Ripley (@DavidLRipley) July 7, 2026
Regulatory Debate Continues as IPO Plans Remain
Kraken also urged Congress to approve the CLARITY Act and establish a clearer digital asset market structure. Sethi argued that consistent legislation would reduce dependence on regulatory enforcement and improve business certainty. Federal regulators also reviewed banking supervision policies after criticism surrounding crypto-related debanking.
The Federal Reserve requested public feedback on removing reputation risk from bank supervision guidance during February. Critics argued that the proposal could reduce pressure on banks serving lawful crypto businesses. Kraken confidentially submitted its draft SEC registration statement during 2025, although reports now place its potential public listing in 2027.
