In a significant legal development, Payward, the parent company of the cryptocurrency exchange Kraken, has filed a lawsuit against its crypto custodian, Etana Custody, and its CEO, Brandon Russell. The lawsuit alleges serious misconduct, including the misappropriation of over $25 million in client funds and the operation of a Ponzi-like scheme, as stated in the official source.
Background of the Legal Dispute
The legal dispute traces back to a partnership established on July 31, 2018, when Kraken engaged Etana to facilitate fiat onramp and offramp services. Tensions escalated in April 2025 when Kraken attempted to withdraw $25 million, only to find that Etana allegedly failed to process the request.
Allegations Against Etana
According to Payward's lawsuit, Etana is accused of commingling Kraken's customer reserves with its own operational funds, which raises significant concerns about the management of client assets. Furthermore, the lawsuit claims that Etana provided misleading account statements, further complicating the situation.
Kraken's Response
Kraken's litigation head, Matt Turetzky, characterized the unfolding events as 'wild' and affirmed the company's commitment to pursuing justice in this matter.
In a notable contrast to its ongoing legal issues, Payward recently announced its plan to acquire the derivatives platform Bitnomial for up to $550 million. This strategic move aims to enhance Kraken's offerings in the digital asset space, as detailed in more details.
