The auditor walked away during a regulatory investigation, and the arbitrator found that Mazars' withdrawal created a "licensing crisis" for Kraken.
An arbitrator, a retired judge, ruled in Kraken's favor after a confidential proceeding.
In 2023, the SEC sued Kraken, alleging it was an unregistered securities exchange operating unlawfully. One month later, Mazars stopped work on its audit of Kraken's 2022 financials. Mazars had received subpoenas from the SEC and a grand jury for its Kraken files. The resignation came with no findings against the exchange.
Arjun Sethi, co-CEO of Payward Inc., said: "When your auditor quits with no findings against you, you inherit a cloud you did nothing to create, and you pay to clear a name that was never dirty."
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The arbitrator wrote that Mazars deserved "credit for being honest," "but that the audit firm still owed Kraken millions." He added: "I have no doubt that the circumstances surrounding this audit were difficult, challenging and at times frustrating. Unfortunately, its accounting procedures and automation were lagging behind."
Because Mazars quit so suddenly, Kraken did not have a signed 2022 audit, which made regulatory submissions more difficult and required a hurried search for a new auditor as state regulators raised concerns about its licensing.
The arbitration process, conducted confidentially by a retired judge, found that Mazars' abrupt departure caused a licensing crisis for Kraken. Even though the SEC later dropped its case, the damage was done - Kraken had to acquire TradeStation Crypto to satisfy state regulatory requirements. The incident demonstrates how an auditor's resignation can trigger severe repercussions, particularly within the crypto sector, which already faces significant regulatory ambiguity.
The SEC's lawsuit, which alleged Kraken operated as an unregistered securities exchange, was dismissed in March 2025 under the Trump administration. That development, however, came too late to undo the damage from Mazars' resignation, which had already forced Kraken into a costly acquisition to resolve its licensing problems.
Forvis Mazars, the firm that now includes Mazars USA, is the 10th biggest accounting firm in the U.S. with about $2.2 billion in revenue.
The court case will determine whether Kraken collects the full award. Meanwhile, according to his latest financial disclosure, President Trump declared $1.4 billion in earnings from crypto-related enterprises last year.
The Kraken-Mazars dispute unfolded against a backdrop of heightened regulatory scrutiny in the cryptocurrency industry. In 2023, the SEC took an aggressive stance, suing multiple exchanges. However, the regulatory landscape shifted under the Trump administration, which dismissed the Kraken case in early 2025.
This reversal, while too late for Kraken's immediate licensing needs, underscored the volatility of crypto enforcement. Meanwhile, President Trump's personal financial ties to the crypto industry, as disclosed in his latest filing, added a layer of political complexity to the sector's future.
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