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According to court filings, PowerTrade allegedly turned Kraken’s account from a surplus of more than $6 million into a deficit of around $2 million by applying a series of unauthorized “corrections” to trades that had already expired or settled months earlier.
Payward, Kraken’s parent company, has filed a lawsuit against UAE-based derivatives platform PowerTrade, accusing its founders of misappropriating over $6 million in digital assets and unrealized gains.
“PowerTrade and its co-founders diverted more than $6 million of Payward’s assets and unrealized profits. We are pursuing legal action to recover those funds,” a Kraken spokesperson said.
As part of the case, Payward has petitioned a U.S. federal court to obtain discovery from several U.S.-based financial institutions to support its claims against PowerTrade and its founders, according to a Thursday filing.
The complaint alleges that PowerTrade drained more than $6 million from Payward’s account through a series of unilateral and unauthorized adjustments.
These moves reportedly involved retroactively reversing profitable trades that had been settled months earlier, allegedly to create an artificial negative balance and seize Payward’s collateral.
“Kraken remains committed to taking decisive action to safeguard the crypto industry,” the exchange said.
Kraken began using PowerTrade for institutional crypto derivatives trading in 2022. The platform, operated out of El Salvador, was co-founded by Mario Gomez Lozada and Bernd Sischka.
In October 2025, amid a decline in bitcoin prices and broader market weakness, Kraken said it became concerned about PowerTrade’s liquidity and creditworthiness and attempted to withdraw its funds, but was unable to do so.
Instead of processing the withdrawal, PowerTrade allegedly executed a series of unauthorized adjustments that shifted Kraken’s account from a $6 million surplus to nearly a $2 million deficit.
The filing states this was carried out through roughly 100 “corrections” tied to trades that had already expired or settled months earlier. Payward also expressed concern that PowerTrade could use the artificially created “debt” to claim Kraken’s bitcoin collateral.
PowerTrade had not responded to requests for comment at the time of publication.
Update (June 25, 16:45 UTC): Loss figures updated based on revised filing; reference to DIFC freezing order removed.
