Kraken Parent Payward Accuses Etana of $25 Million Ponzi-Like Custody Fraud
Payward, the dad or mum firm of crypto alternate Kraken, has accused Etana Custody and its CEO of orchestrating a Ponzi-like scheme. The alleged fraud misappropriated greater than $25 million in buyer reserve funds.
The second amended criticism was filed May 4, 2026 within the U.S. District Court for the District of Colorado. It escalates earlier breach-of-contract claims into detailed fraud allegations towards the belief firm and chief government Dion Brandon Russell.
Inside the Alleged Custody Fraud
Payward says Etana commingled Kraken buyer reserves with firm cash. The criticism claims at the very least $16 million was funneled into Seabury Trade Capital notes.
Those notes later defaulted. The filing alleges Russell directed the misuse personally whereas issuing dashboard balances displaying property as absolutely safe.
Kraken requested a roughly $25 million withdrawal in April 2025. Etana stalled with what Payward calls fabricated reconciliation points.
The agency lacked liquidity to return the funds. Etana was as an alternative utilizing incoming deposits to cowl prior shortfalls, the submitting alleges. The criticism characterizes the sample as Ponzi-like.
Receivership Limits the Recovery
Etana entered statutory liquidation in November 2025 after Colorado regulators issued cease-and-desist and suspension orders. According to the court-appointed receiver, money holdings stand at roughly $6.83 million. Liabilities exceed $26 million, most of which represents the Kraken declare.
The receiver is cooperating with Payward by producing paperwork and making former workers accessible.
Crypto holdings saved on Amazon Web Services had been briefly inaccessible. AWS terminated the account over unpaid charges in March 2026.
The federal case is stayed towards Etana entities however proceeds towards Russell. He faces private legal responsibility for fraud and civil theft. With the receiver opting towards a vigorous protection, Payward’s restoration hinges on the claims course of and any insurance coverage proceeds.
The publish Kraken Parent Payward Accuses Etana of $25 Million Ponzi-Like Custody Fraud appeared first on BeInCrypto.