[ND Analysis] A Victory for the Rule of Law: Kraken Secures $22 Million Judgment Against Auditor Mazars for Exiting Amid 'Operation Choke Point 2.0'

Payward Inc., the parent company of crypto exchange Kraken, has secured a $22 million arbitration award against its former auditor Mazars, marking a significant legal victory for the digital asset industry. As of July 2026, Kraken is undergoing procedures in the Delaware Court of Chancery to finalize this arbitration ruling, which is expected to be recorded as a rare case of holding a professional service provider accountable for a sudden departure amid regulatory pressure known as "Operation Choke Point 2.0."

America’s greatest competitive advantage is not capital or technology, but the rule of law. A free society depends on institutions that value evidence over politics, contracts over coercion, and due process over public narratives. This is why we fought. — Arjun Sethi, Co-CEO of Payward

This ruling is the result of an arbitrator already siding with Kraken, and the current court action is a step to formalize this award into a final judgment. Although Mazars has now been integrated into the Forvis Mazars group, it could not escape liability for its past breach of contract with Kraken. Through this lawsuit, Kraken has sent a strong warning against the practice of abandoning commitments to clients citing regulatory pressure.

Mazars' Sudden Audit Halt and Breach of Contract

In late 2023, Mazars abruptly halted its work just days before completing the audit of Kraken's 2022 financial statements. Kraken claimed that Mazars' departure occurred without any notice, causing significant damage by preventing the acquisition of financial reports essential for business operations. At the time, Mazars shocked the entire industry by simultaneously severing ties not only with Kraken but also with other major crypto firms like Binance.

• Late 2023: Mazars ceases work just before completing the 2022 financial audit
• 2024–2025: Payward initiates arbitration proceedings, claiming breach of contract and damages
• July 2026: Arbitrator awards $22 million in damages to Kraken
• July 7, 2026: Kraken files for final approval in Delaware court to enforce the judgment

Behind Mazars' decision was a regulatory environment known as 'Operation Choke Point 2.0.' At the time, U.S. federal regulators pressured banks and service providers to sever ties with crypto firms, leading companies like Mazars to withdraw from the crypto sector to avoid 'reputational risk.' This environment resulted in crypto firms being unable to access essential financial and accounting services despite operating legitimate businesses.

With the audit halted, Kraken faced a so-called 'licensing crisis' in maintaining state licenses and establishing banking partnerships. The $22 million award reflects the massive resources deployed to restore trust damaged by the auditor's departure and to resolve legal and operational issues. Beyond mere financial compensation, Kraken made it clear that professional service providers should not abandon contractual obligations due to political pressure.

Auditor Responsibility and a New Industry Precedent

This ruling is expected to serve as a wake-up call against service providers unilaterally terminating contracts due to political or regulatory changes. In the past, crypto firms often responded helplessly to 'debanking' by the financial sector, but Kraken's victory proves that contract-based legal liability can take precedence over regulatory pressure. This can serve as a strong legal basis for crypto firms when negotiating with service providers in the future.

Entering 2025 and 2026, the crypto industry environment is gradually shifting from regulatory pressure to the protection of financial access. In particular, as executive orders announced in early 2025 emphasized fair access to banking services for crypto firms, this victory has become a symbolic event marking the end of the era of hostile regulation. The industry has now laid the foundation for building more mature business relationships, moving away from the practice of terminating contracts out of fear of regulators.

Once the Delaware court issues its final ruling, Kraken will fully secure the right to enforce the award. Industry experts anticipate that this case will serve as an important benchmark for strengthening transparency and accountability in future relationships between crypto firms and traditional accounting firms. Kraken's legal victory is a powerful signal that the crypto industry can protect its rights as part of the mainstream financial system.