Summary
- Kraken parent company Payward filed an application with a U.S. federal court to obtain discovery from various U.S.-based financial institutions about PowerTrade and its co-founders.
- “The discovery we seek will help Payward identify additional assets to freeze and ensure that bad actors like PowerTrade are not able to harm others in the industry,” Kraken stated in a statement.
Payward, the parent company of cryptocurrency exchange Kraken, has taken legal action against PowerTrade, a high-leverage derivatives platform based in the U.A.E., claiming the firm’s founders misappropriated $7.2 million of Kraken’s digital assets and unrealized gains.
“PowerTrade and its co-founders misappropriated $7.2 million of Payward’s digital assets and unrealized gains. Payward’s legal proceedings seek the return of those funds,” a Kraken spokesperson stated in an emailed statement to CoinDesk.
As such, Payward filed an application with a U.S. federal court seeking discovery from various U.S.-based financial institutions regarding PowerTrade and its co-founders to aid legal proceedings against them, as reported by a Thursday filing.
The lawsuit claims that PowerTrade improperly stripped more than $6 million from Payward’s PowerTrade account through a series of unilateral and unauthorized transactions.
These transactions included retroactively canceling Payward’s profitable trades that had closed or settled months earlier as part of an effort to manufacture a negative balance in Payward’s trading account and abscond with Payward’s collateral, the filing alleged.
“We have already obtained an interim worldwide freezing order from the DIFC [Dubai International Financial Centre] Courts against PowerTrade and its co-founders and have commenced other legal proceedings in other jurisdictions,” the Kraken spokesperson stated.
