Payward, the parent company of cryptocurrency exchange Kraken, has filed a lawsuit against crypto derivatives platform PowerTrade, alleging that about $7.2 million in digital assets and trading gains were improperly removed through disputed account corrections and retroactive trade cancellations, according to court filing details
The complaint filed in a U.S. federal court claims PowerTrade executed a series of unilateral adjustments that reduced Payward's institutional trading balance by more than $6 million, including reversals of trades that had already been settled months earlier, CryptoNews detailed.
The filing further alleges that these adjustments were used to create an artificial negative balance in Payward's account, shifting its position from a surplus of more than $6 million to a deficit of nearly $2 million following roughly 100 separate corrections.
According to the court documents, Payward began institutional derivatives trading with PowerTrade in 2022 and maintained the relationship until October 2025, when broader digital asset market declines increased liquidity pressure across trading platforms.
The filing adds that Payward attempted to withdraw funds during the October 2025 market downturn but was unable to complete the process, after which the disputed adjustments were applied instead of releasing capital, CryptoNews reported.
A Kraken spokesperson confirmed the legal action and said Payward is seeking recovery of assets and gains it believes were improperly taken, while also noting that a worldwide freezing order was obtained from the Dubai International Financial Centre Courts against PowerTrade and its co-founders, CoinDesk reported.
Payward has also filed an application in U.S. federal court seeking discovery from financial institutions linked to PowerTrade in order to trace additional assets and support recovery efforts, Blockworks reported.
PowerTrade has not issued a public response to the allegations at the time of filing.
The dispute adds to a broader pattern of legal conflicts involving institutional crypto trading relationships, custody arrangements, and liquidity stress events across digital asset markets, according to analysis in Blockworks coverage of similar Kraken-related disputes.
In a separate but related case, Kraken's parent company has also been involved in litigation against a former custody partner over alleged misuse of more than $25 million in client funds, CoinDesk reported.
