Kraken Files Lawsuit Against PowerTrade Over Alleged Misuse of Funds

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PowerTrade allegedly converted Kraken’s account from a surplus of over $6 million into a deficit of roughly $2 million through a series of unauthorized “corrections” tied to trades that had already expired or settled months earlier, according to a legal filing.

Payward, Kraken’s parent company, has initiated legal proceedings against PowerTrade—a UAE-based high-leverage derivatives platform—accusing its founders of misappropriating more than $6 million in digital assets and unrealized profits.

“PowerTrade and its co-founders misappropriated over $6 million of Payward’s assets and unrealized gains. Our legal action aims to recover those funds,” a Kraken spokesperson said in a statement.

As part of the case, Payward filed an आवेदन in a U.S. federal court seeking 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 improperly removed more than $6 million from Payward’s account via a series of unilateral and unauthorized transactions.

These actions reportedly included retroactively canceling profitable trades that had already been settled months earlier, allegedly to create an artificial negative balance and seize Payward’s collateral.

“Kraken is committed to taking decisive steps to protect the integrity of the crypto industry,” the company said.

Kraken began offering institutional crypto derivatives trading through PowerTrade in 2022. The platform, operated out of El Salvador, was co-founded by Mario Gomez Lozada and Bernd Sischka.

In October 2025, amid a drop in bitcoin prices and broader market weakness, Kraken grew concerned about PowerTrade’s liquidity and credit risk and attempted to withdraw its funds, but was unable to do so, the filing states.

Instead of returning the funds, PowerTrade allegedly executed a series of unauthorized adjustments that shifted Kraken’s account from a $6 million positive balance to nearly a $2 million deficit.

This was reportedly done through approximately 100 “corrections” linked to trades that had already expired or settled months earlier. Payward 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): Revised loss figures based on updated filing; reference to DIFC freezing order removed.