CoinDesk
Payward, the parent company of crypto exchange Kraken, has filed a U.S. federal court application seeking discovery from financial institutions tied to PowerTrade and its co-founders, alleging the high-leverage derivatives platform misappropriated $7.2 million of Payward's digital assets and unrealized gains. The lawsuit claims PowerTrade carried out about 100 unauthorized "corrections" tied to trades that had expired or settled months earlier, retroactively flipping Payward's account from a balance above $6 million into a negative balance of nearly $2 million.
Kraken's statement said the company has already obtained an interim worldwide freezing order from the Dubai International Financial Centre Courts against PowerTrade and its co-founders, and has "commenced other legal proceedings in other jurisdictions." PowerTrade did not respond to a request for comment.
Why it matters
The mechanics of the alleged fraud are unusual. Kraken began institutional derivatives trading on PowerTrade in 2022, when the platform was operated out of El Salvador by co-founders Mario Gomez Lozada and Bernd Sischka. By October 2025, with bitcoin falling, Kraken grew concerned about PowerTrade's liquidity and tried to withdraw its funds. The lawsuit says PowerTrade refused, then moved the account into a deficit through retroactive trade cancellations rather than returning the collateral.
The filing paints a pattern Kraken's lawyers argue was designed to "manufacture" debt Payward did not owe, letting PowerTrade absorb Payward's bitcoin collateral. That framing matters because it reframes the dispute from a counterparty default into an alleged premeditated scheme.
Market impact
The dollar figure is small relative to Kraken's balance sheet, but the discovery application targets U.S. financial institutions tied to PowerTrade and its principals, meaning the case could surface further detail on cross-border fund flows between U.S. venues and U.A.E.-based derivatives platforms. The parallel DIFC freezing order also signals that Kraken is pursuing the assets on multiple fronts, with the U.S.
Frequently asked questions
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What is Kraken alleging PowerTrade did with its funds?
Kraken's parent Payward alleges PowerTrade executed about 100 unauthorized "corrections" tied to trades that had expired or settled months earlier, retroactively moving Payward's account from above $6 million into a negative balance of nearly $2 million.
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How much money is at the center of the lawsuit?
Payward is claiming $7.2 million in digital assets and unrealized gains were misappropriated by PowerTrade and its co-founders.
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What legal action has Kraken already taken outside the U.S.?
Kraken said it has obtained an interim worldwide freezing order from the Dubai International Financial Centre Courts against PowerTrade and its co-founders, and has commenced parallel proceedings in other jurisdictions.
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Who are the co-founders of PowerTrade named in the case?
The filing names PowerTrade co-founders Mario Gomez Lozada and Bernd Sischka. At the time Kraken began trading on the platform in 2022, it was operated out of El Salvador; it is now described as based in the U.A.E.
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Why did Kraken first grow concerned about PowerTrade?
Kraken says it became uneasy about PowerTrade's liquidity and creditworthiness in October 2025 when bitcoin fell and markets declined, then tried to withdraw its funds and was unable to, prompting the legal action.
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