Payward, the parent company of cryptocurrency exchange Kraken, has filed a lawsuit in a U.S. federal court against crypto derivatives platform PowerTrade. The complaint alleges that approximately $7.2 million in digital assets and trading gains were improperly removed from its institutional trading account through disputed adjustments and retroactive trade cancellations, according to court filing details cited by multiple crypto news outlets. The dispute stems from a trading relationship that began in 2022 and continued until October 2025, when Payward attempted to withdraw funds during a market downturn but was unable to complete the process. The case adds to a broader pattern of legal conflicts involving institutional crypto trading relationships and custody arrangements across digital asset markets.
PowerTrade Applied Over 100 Account Corrections to Payward Balance
The complaint filed in U.S. federal court claims PowerTrade executed a series of unilateral adjustments that reduced Payward's institutional trading balance by more than $6 million, including reversals of trades that had already been settled months earlier, according to CryptoNews. The filing further alleges that these adjustments were used to create an artificial negative balance in Payward's account, shifting its position from a surplus of more than $6 million to a deficit of nearly $2 million following approximately 100 separate corrections.
Payward Maintained Trading Relationship from 2022 Until October 2025
According to the court documents, Payward began institutional derivatives trading with PowerTrade in 2022 and maintained the relationship until October 2025, when broader digital asset market declines increased liquidity pressure across trading platforms. The filing adds that Payward attempted to withdraw funds during the October 2025 market downturn but was unable to complete the process, after which the disputed adjustments were applied instead of releasing capital, CryptoNews reported.
Payward Obtained Freezing Order from Dubai Courts Against PowerTrade
A Kraken spokesperson confirmed the legal action and said Payward is seeking recovery of assets and gains it believes were improperly taken, while also noting that a worldwide freezing order was obtained from the Dubai International Financial Centre Courts against PowerTrade and its co-founders, CoinDesk reported. Payward has also filed an application in U.S. federal court seeking discovery from financial institutions linked to PowerTrade in order to trace additional assets and support recovery efforts, Blockworks reported. PowerTrade has not issued a public response to the allegations at the time of filing.
Kraken Parent Company Faces Separate Custody Dispute Over $25 Million
In a separate but related case, Kraken's parent company has also been involved in litigation against a former custody partner over alleged misuse of more than $25 million in client funds, CoinDesk reported. The dispute adds to a broader pattern of legal conflicts involving institutional crypto trading relationships, custody arrangements, and liquidity stress events across digital asset markets, according to analysis in Blockworks coverage of similar Kraken-related disputes.
FAQ
What did Payward allege PowerTrade did with its trading account?
Payward alleged that PowerTrade executed unilateral adjustments and retroactive trade cancellations that reduced its institutional trading balance by more than $6 million, shifting the account from a surplus of more than $6 million to a deficit of nearly $2 million through approximately 100 separate corrections.
Why did Payward attempt to withdraw funds from PowerTrade in October 2025?
Payward attempted to withdraw funds during the October 2025 market downturn when broader digital asset market declines increased liquidity pressure across trading platforms, but was unable to complete the withdrawal process before the disputed adjustments were applied.
