IMF
- The parent company of one of the top US crypto exchanges sued its former auditors.
- Kraken alleged that Mazars quit its audit after the SEC sued Kraken, a case that was later dropped.
- The auditor’s withdrawal prompted Kraken to acquire TradeStation Crypto, records show.
A month after U.S. regulators brought a lawsuit against cryptocurrency exchange Kraken in 2023, the exchange’s auditors quit, according to court records. Now Kraken’s parent company is suing its former auditors at Mazars USA for $22 million.
The lawsuit follows a confidential arbitration in which the arbitrator, a retired judge, awarded Kraken $22 million, according to redacted copies of his decisions filed in Kraken’s lawsuit. One of his rulings noted that Mazars’ withdrawal created “a licensing crisis” for Kraken, affecting the exchange’s effort to obtain state money transmitter licenses. The arbitrator awarded Kraken damages connected to its purchase of TradeStation Crypto, an investment platform.
Kraken is suing to obtain that award. A spokesman for Forvis Mazars didn’t immediately respond to a request for comment.
Mazars, now part of the Forvis Mazars group, halted its work for Kraken in late 2023, just days before completing work on the audit of Kraken’s 2022 financials, Kraken alleges in its lawsuit. Kraken by that point was under investigation by the US Securities and Exchange Commission and trying the patience of state regulators by taking so long to submit audits required to obtain the licenses that it needed, court records say.
Mazars in 2023 received subpoenas from a grand jury and the SEC for its Kraken files, according to court filings. Mazars stopped work on its Kraken audit a month after the SEC filed a lawsuit accusing Kraken of operating illegally as an unregistered securities exchange. The SEC’s complaint cited comments or findings that appeared to be from Mazars’ audit workpapers, according to an arbitration decision.
“When your auditor quits with no findings against you, you inherit a cloud you did nothing to create, and you pay to clear a name that was never dirty,” Arjun Sethi, the co-CEO of Kraken’s parent Payward Inc. told Business Insider in an emailed statement. “We spent years and millions in legal fees doing exactly that.”
The SEC withdrew its lawsuit against Kraken in March 2025, shortly after President Trump took office for his second term. The Trump administration has eased regulations and rolled back restrictions related to the crypto industry. The president reported $1.4 billion in income tied to crypto ventures last year, according to his recent financial disclosure.
The auditor’s withdrawal prompted an acquisition
Coindesk, an industry publication, reported in 2024 that Kraken acquired the Tradestation unit partly because of its regulatory licenses. According to the arbitration records, $12.5 million of the arbitration award was related to the cost of the acquisition.
The arbitrator wrote that Mazars deserved “credit for being honest,” but that the audit firm still owed Kraken millions.
“I have no doubt that the circumstances surrounding this audit were difficult, challenging and at times frustrating,” the arbitrator wrote. “Kraken was in its early years of operation but was rapidly growing into a major player in the cryptocurrency world. Unfortunately, its accounting procedures and automation were lagging behind.”
Forvis Mazars is the 10th biggest accounting firm in the US with about $2.2 billion in revenue, according to Inside Public Accounting. Mazars, one of its predecessors, previously counted Trump among its clients, and his efforts to protect his financial records from investigators during the Biden administration were a subject of extensive litigation.