Kraken’s parent company, Payward, is taking legal action against crypto derivatives platform PowerTrade, accusing the company and its founders of improperly withholding and misusing more than $7 million in digital assets and trading gains.
According to court filings, Payward claims PowerTrade and its co-founders misappropriated approximately $7.2 million worth of cryptocurrency and unrealized profits that belonged to Kraken.
The dispute has now expanded across multiple jurisdictions, with Payward seeking court assistance in the United States while also pursuing legal remedies elsewhere.
“PowerTrade and its co-founders misappropriated $7.2 million of Payward’s digital assets and unrealized gains. Payward’s legal proceedings seek the return of those funds,” a Kraken spokesperson said.
Payward seeks U.S. court assistance to trace assets linked to PowerTrade
As part of the case, Payward has filed an application in a U.S. federal court requesting information from several American financial institutions. The company says the records could help identify assets linked to PowerTrade and support ongoing legal proceedings.
At the heart of the dispute are allegations that PowerTrade altered Kraken’s trading account after the fact.
According to the filing, Kraken had been using PowerTrade for institutional crypto derivatives trading since 2022. The relationship reportedly came under strain in late 2025 when crypto markets weakened and bitcoin prices declined.
Kraken says it became concerned about PowerTrade’s financial health and attempted to withdraw funds from the platform. However, the company claims it was unable to access its assets.
The lawsuit alleges that instead of returning the funds, PowerTrade carried out a series of unauthorized account adjustments that dramatically changed Kraken’s balance.
Payward claims the platform retroactively canceled or modified profitable trades that had already settled months earlier. Those changes allegedly transformed an account holding more than $6 million into one showing a negative balance approaching $2 million.
According to Kraken, around 100 separate “corrections” were applied to historical trades.
The company argues that these adjustments were not legitimate accounting corrections but were instead designed to create an artificial debt. Payward says it feared PowerTrade would then use that manufactured negative balance as justification for retaining or seizing bitcoin collateral held on the platform.
The allegations have prompted Kraken to pursue aggressive legal measures.
The company said it has already secured an interim worldwide freezing order from the Dubai International Financial Centre (DIFC) Courts against PowerTrade and its co-founders. The order is intended to prevent assets from being moved while the dispute is being litigated.
Kraken expands legal efforts as it seeks recovery of disputed funds
Kraken says it is also pursuing legal action in other jurisdictions and is seeking additional information that could help identify assets available for recovery.
“The discovery we seek will help Payward identify additional assets to freeze and ensure that bad actors like PowerTrade are not able to harm others in the industry,” the company said.
PowerTrade was founded by CEO Mario Gomez Lozada and CFO Bernd Sischka and built its business around offering high-leverage cryptocurrency derivatives trading. The platform has operated internationally, including through entities based in El Salvador and the United Arab Emirates.
The company has not publicly responded to the allegations.
For the broader crypto industry, the dispute serves as another reminder of the risks that can emerge when large sums of capital move across international trading platforms. While institutional participation in crypto continues to grow, issues involving custody, collateral management, and counterparty trust remain critical concerns.
The outcome of the case could have implications beyond the two companies involved, particularly as courts increasingly confront complex cross-border disputes involving digital assets and crypto derivatives markets.
