Court documents allege that PowerTrade converted Kraken’s account from a surplus exceeding $6 million into a deficit of about $2 million by implementing a series of unauthorized “corrections” tied 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 more than $6 million in digital assets and unrealized gains.

“PowerTrade and its co-founders improperly diverted over $6 million of Payward’s assets, and we are pursuing legal action to recover those funds,” a Kraken spokesperson said.

As part of the case, Payward has submitted a request for discovery in a U.S. federal court, seeking information from multiple U.S.-based financial institutions to support its claims, according to a Thursday filing.

The complaint alleges that PowerTrade drained more than $6 million from Payward’s account through a sequence of unilateral and unauthorized adjustments.

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

“Kraken remains committed to taking decisive action to help safeguard the crypto industry,” the company said.

Kraken began institutional derivatives trading on 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 decline in bitcoin prices and broader market weakness, Kraken grew concerned about PowerTrade’s liquidity and attempted to withdraw its funds, but was unable to do so.

Instead, PowerTrade allegedly executed roughly 100 unauthorized “corrections,” shifting Kraken’s account from a $6 million surplus to nearly a $2 million deficit.

Payward warned in the filing that PowerTrade could attempt to use the artificially created “debt” to claim its 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.