Kraken's parent company, Payward, has initiated legal proceedings against PowerTrade, alleging that the derivatives trading firm misappropriated $7.2 million in digital assets and unrealized gains.
PowerTrade allegedly transformed Kraken’s positive balance of approximately $7 million into a $2 million deficit through unauthorized trades adjustments, according to court documents.
By Ian Allison|Edited by Aoyon AshrafUpdated Jun 25, 2026, 1:55 p.m. Published Jun 25, 2026, 1:53 p.m. 2 min read
- Payward has filed a request with a U.S. federal court to obtain information from various U.S. financial institutions regarding PowerTrade and its founders.
- "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," stated Kraken.
Payward, which operates Kraken, has taken legal action against PowerTrade, a high-leverage derivatives platform headquartered in the U.A.E., claiming that the firm’s founders misappropriated $7.2 million of Kraken’s assets.
According to a Kraken spokesperson, "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."
Consequently, Payward filed a request with a U.S. federal court to gather information from several U.S.-based financial institutions regarding PowerTrade and its founders to assist with legal actions against them, as indicated in a Thursday filing.
The lawsuit asserts that PowerTrade improperly removed over $6 million from Payward’s account through a series of unauthorized transactions.
These transactions involved canceling profitable trades of Payward that had been closed or settled months prior, allegedly to create a negative balance in Payward’s account and misappropriate its collateral.
“We have already secured a temporary worldwide freezing order from the DIFC [Dubai International Financial Centre] Courts against PowerTrade and its co-founders and have initiated additional legal actions in other jurisdictions,” the Kraken representative mentioned.
“The information we seek will help Payward identify further assets to freeze and ensure that bad actors like PowerTrade cannot inflict harm on others in the industry,” Kraken added.
Kraken began its institutional cryptocurrency derivatives trading on PowerTrade in 2022, a company co-founded by CEO Mario Gomez Lozada and CFO Bernd Sischka, which operates from El Salvador.
In October 2025, following a decline in Bitcoin prices and market downturns, Kraken expressed concerns regarding PowerTrade’s liquidity and creditworthiness, attempting to withdraw its funds but was unsuccessful, according to the filing.
Rather than returning the funds, the lawsuit alleges that PowerTrade executed a series of unauthorized actions that shifted Kraken’s account from over $6 million to a negative balance of nearly $2 million.
This was accomplished through around 100 “corrections” related to trades that had expired or settled months earlier, the filing stated. Payward expressed concerns that PowerTrade might use the “debt” it artificially created to seize Payward’s Bitcoin collateral.
PowerTrade has not yet responded to a request for comment.
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