Kraken’s Payward Files Lawsuit Against Crypto Custodian Etana, Alleging $25M Ponzi Plot
Payward, the dad or mum firm of cryptocurrency trade Kraken, has filed a lawsuit towards its very personal crypto custodian, Etana Custody, and its CEO, Brandon Rusell, alleging that Etana misappropriated greater than $25 million in consumer funds and operated what Payward characterizes as a “Ponzi-like” scheme.
Etana Misused Kraken Reserves
The dispute traces again to a partnership shaped by means of Payward. According to the timeline supplied, on July 31, 2018, Kraken—by way of Payward—partnered with Etana Custody to help fiat on-ramp and off-ramp providers.
Payward’s submitting then factors to a significant breakdown in April 2025, when Kraken tried to withdraw $25 million, and Etana was allegedly unable to fulfill the request.
The lawsuit contends that Etana allegedly commingled Kraken customer reserves with its personal operational funds, utilizing cash for working bills, and a foreign-exchange hedging technique the place, Payward alleges, income have been saved whereas buyer funds have been in danger.
Kraken’s dad or mum firm additional claims that Etana issued false account statements and dashboard balances exhibiting funds as absolutely secured and accessible, despite the fact that inside information allegedly indicated shortages.
When these shortages allegedly emerged, Payward says Etana lined them by drawing on new buyer deposits to fulfill older obligations—an association that, if true, would proceed solely so long as new cash saved arriving.
Kraken’s litigation head, Matt Turetzky, addressed the allegations in a submit on X (previously Twitter). In that message, he said the state of affairs was “wild,” describing claims that Etana spent the trade’s cash on working bills and dangerous investments, then allegedly despatched deceptive statements for years.
Turetzky additionally asserted that Etana’s personal authorized group beneficial a “immediate, full, and clear disclosure” to Kraken, however that, in accordance with his account, as a substitute of receiving restitution, Kraken was met with excuses.
He emphasised Kraken’s scale—stating it serves “tens of millions of customers” and processes “tons of of billions of {dollars} in quarterly transaction quantity”—and mentioned Kraken would “discover you,” “sue you,” and “not cease till justice has been served.”
Payward Completes Bitnomial Acquisition
While the lawsuit unfolds, Payward additionally announced a significant company step accomplished throughout Monday’s developments: it has completed its acquisition of Bitnomial, a crypto-native derivatives platform licensed by the US Commodity Futures Trading Commission (CFTC).
Payward says this deal offers it what it calls the complete US derivatives infrastructure stack, comprising a Futures Commission Merchant (FCM), a Designated Contract Market (DCM), and a Derivatives Clearing Organization (DCO).
In its launch, Payward described this regulatory setup because the platform that permits it to deliver CFTC-regulated spot margin, perpetuals, and choices to eligible US shoppers on Kraken and NinjaTrader.
Arjun Sethi, the cryptocurrency trade’s Co-CEO, mentioned the closing of the transaction gives a regulated US derivatives basis “purpose-built for digital property, not tailored to them.”
He added that the stack “is what makes the subsequent set of merchandise doable,” with Payward beginning with spot margin on Kraken and planning for perpetuals and choices to observe—all below CFTC regulation throughout the United States.
Featured picture from OpenArt, chart from TradingView.com
