Payward, Kraken's parent company, has requested Delaware's Court of Chancery finalize a $22 million judgment against Mazars USA after an arbitrator ruled in the exchange's favor. The case highlights ongoing tensions between crypto firms and traditional service providers that have shaped workforce stability and compliance hiring across the industry.
Abrupt Audit Withdrawal Triggers Legal Battle
Mazars USA withdrew from Kraken's 2022 audit in December 2023, just days before completion, despite three prior years of auditing the exchange and issuing clean opinions. The firm cited no disagreements with management, no integrity concerns, and no fraud findings before abandoning the engagement.
The withdrawal came weeks after the SEC filed a complaint against Kraken—a case later dismissed with prejudice and no penalties. According to co-CEO Arjun Sethi, the disrupted audit cost Kraken years of effort and millions in legal fees to secure replacement auditors and maintain relationships with banks, regulators, and business partners.
The timing proves particularly significant as Kraken pursues a full banking license in Lithuania, which would enable traditional banking services across the European Economic Area. The company has already achieved Federal Reserve payment access in the U.S. and regulatory authorization in the UAE.
Broader Regulatory Pressure on Crypto Industry
Sethi framed the incident within "Operation Chokepoint 2.0," describing coordinated regulatory actions that restricted crypto firms' access to banking services. Between late 2022 and early 2023, federal banking regulators issued warnings about crypto-related business models, the SEC implemented SAB 121 accounting guidance that made custody uneconomical for banks, and major payment networks Silvergate and Signature collapsed.
FOIA documents revealed the FDIC sent at least 25 letters urging banks to limit crypto activities. The Federal Reserve denied Custodia Bank a master account despite its Wyoming charter.
Much of this framework has since reversed. The SEC rescinded SAB 121, banking regulators withdrew joint statements, and a House committee concluded regulators used informal pressure to sideline legitimate crypto businesses.
Workforce Implications
For blockchain professionals, these developments signal improving conditions for compliance, legal, and audit roles as regulatory clarity increases. The House passed the CLARITY Act in July 2025 with bipartisan support (294-134), which would establish defined oversight between the CFTC and SEC while protecting software developers.
As exchanges like Kraken expand into traditional finance, demand for professionals with cross-sector expertise in both crypto and banking regulation continues growing across U.S. and European markets.
