Kraken sues custodian Etana over alleged $25M Ponzi-like misappropriation of client funds.

Payward, Inc., Kraken's parent company, has filed an amended complaint in U.S. District Court in Colorado accusing digital-assets custodian Etana Custody of running a "Ponzi-like enterprise" — commingling client funds to cover operating expenses and finance risky investments. Kraken says discovery revealed the missing $25 million was not the result of poor recordkeeping but deliberate misuse by Etana and its CEO, Dion Brandon Russell.

Kraken had entrusted Etana with hundreds of millions of dollars in client assets. When it requested the funds back, Etana failed to return $25 million. The Colorado Banking Board placed Etana into liquidation in November 2025 after the custodian could no longer meet capital requirements.

The amended filing adds a formal fraud claim against both Etana and Russell. Kraken is seeking the full $25 million plus interest and attorney's fees. Legal…