{"id":21365,"date":"2026-07-07T23:01:19","date_gmt":"2026-07-07T23:01:19","guid":{"rendered":"https:\/\/cryptoted.net\/index.php\/2026\/07\/07\/kraken-wins-22m-as-arjun-sethi-blasts-operation-chokepoint-2-0\/"},"modified":"2026-07-07T23:01:19","modified_gmt":"2026-07-07T23:01:19","slug":"kraken-wins-22m-as-arjun-sethi-blasts-operation-chokepoint-2-0","status":"publish","type":"post","link":"https:\/\/cryptoted.net\/index.php\/2026\/07\/07\/kraken-wins-22m-as-arjun-sethi-blasts-operation-chokepoint-2-0\/","title":{"rendered":"Kraken wins $22M as Arjun Sethi blasts Operation Chokepoint 2.0"},"content":{"rendered":"<p> <br \/>\n<br \/><img decoding=\"async\" src=\"https:\/\/media.crypto.news\/2023\/10\/crypto-news-Kraken05.webp\" \/><\/p>\n<div>\n<p class=\"is-style-lead\">Kraken has secured a $22 million arbitration award against its former auditor Mazars USA, with co-CEO Arjun Sethi linking the dispute to what he described as Operation Chokepoint 2.0.<\/p>\n<div id=\"cn-block-summary-block_b6cb8e080e53042ada45bbddd726da2b\" class=\"cn-block-summary\">\n<p>\n        <span class=\"tabs__item is-selected\">Summary<\/span>\n    <\/p>\n<div class=\"cn-block-summary__content\">\n<ul class=\"wp-block-list\">\n<li>Kraken secured a $22 million arbitration award against former auditor Mazars over its withdrawn 2022 audit.<\/li>\n<li>Co-CEO Arjun Sethi linked the dispute to Operation Chokepoint 2.0 and called for passage of the CLARITY Act.<\/li>\n<li>The exchange continues expanding its product suite with tokenized stock collateral and institutional lending services.<\/li>\n<\/ul><\/div>\n<\/div>\n<p><!-- .cn-block-summary --><\/p>\n<p>According to a letter published Tuesday by Kraken co-CEO Arjun Sethi, parent company Payward has asked the Delaware Court of Chancery to enter judgment on the arbitration award after prevailing against Mazars USA. The dispute centers on the firm\u2019s withdrawal from Kraken\u2019s nearly completed 2022 audit, which Sethi said caused financial damage to the exchange.<\/p>\n<figure class=\"wp-block-embed is-type-rich is-provider-x wp-block-embed-x\">\n<div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">America\u2019s greatest competitive advantage isn\u2019t capital or technology. It\u2019s the rule of law.<\/p>\n<p>A free society depends on institutions that value evidence over politics, contracts over coercion, and due process over public narratives.<\/p>\n<p>That\u2019s exactly why we fought. Not just for\u2026<\/p>\n<p>\u2014 Arjun Sethi (@arjunsethi) <a rel=\"nofollow\" href=\"https:\/\/x.com\/arjunsethi\/status\/2074445897631727721?ref_src=twsrc%5Etfw\">July 7, 2026<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n<p>Sethi wrote that Mazars ended the engagement despite finding no fraud, raising no concerns about Kraken\u2019s management and reporting no disagreements with the company. He argued that the decision disrupted access to banking relationships, licensing processes and other essential business services that rely on completed independent audits.<\/p>\n<p>Describing audits as critical infrastructure for financial companies, Sethi wrote that \u201can audit is not a favor. It is oxygen,\u201d while arguing that lawful crypto firms were denied access to basic financial services during the period.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p>\n<h2 class=\"wp-block-heading\">Sethi ties audit dispute to regulatory pressure<\/h2>\n<p>In the letter, Sethi attributed Mazars\u2019 withdrawal to Operation Chokepoint 2.0, a term used by parts of the crypto industry to describe alleged coordinated pressure on banks, auditors and service providers to distance themselves from digital asset companies.<\/p>\n<p>To support that argument, the letter pointed to several regulatory developments during 2023. These included joint guidance issued by U.S. banking regulators, the Securities and Exchange Commission\u2019s since-rescinded Staff Accounting Bulletin No. 121, and the collapse of crypto-focused banking networks Silvergate SEN and Signature Bank\u2019s Signet payment system.<\/p>\n<p>Sethi also urged Congress to pass the <a href=\"https:\/\/crypto.news\/tag\/clarity-act\/\" target=\"_blank\">CLARITY Act<\/a>, saying a dedicated crypto market structure law would provide clearer operating rules for digital asset companies instead of relying on enforcement actions.<\/p>\n<p>Offering his own reaction on X, Kraken co-CEO Dave Ripley said the arbitration case represented only part of what happened during that period. Ripley described the $22 million award as compensation for financial harm that he said resulted from a coordinated campaign against the crypto industry.<\/p>\n<figure class=\"wp-block-embed is-type-rich is-provider-x wp-block-embed-x\">\n<div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">It&#8217;s been a while since we talked about Chokepoint 2.0.<\/p>\n<p>Kraken will enter a $22M award with the Delaware Court of Chancery \u2014 compensation for financial harm inflicted on us by the coordinated campaign to cut crypto off from banking, auditors, and other essential services. <a rel=\"nofollow\" href=\"https:\/\/t.co\/gJoJ5ytU07\">pic.twitter.com\/gJoJ5ytU07<\/a><\/p>\n<p>\u2014 Dave Ripley (@DavidLRipley) <a rel=\"nofollow\" href=\"https:\/\/x.com\/DavidLRipley\/status\/2074523420747026774?ref_src=twsrc%5Etfw\">July 7, 2026<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n<p>Meanwhile, U.S. regulators have continued reviewing banking oversight tied to digital assets. In February, the Federal Reserve requested public feedback on a proposal to remove \u201creputation risk\u201d from bank supervision after its 2025 directive instructing supervisors to stop pressuring banks to close customer accounts over reputational concerns. Critics of the previous framework argued the proposal could help end practices associated with Operation Chokepoint 2.0.<\/p>\n<h2 class=\"wp-block-heading\">Kraken expands products while IPO plans continue<\/h2>\n<p>Even as the legal dispute moves through the Delaware court, Kraken has continued adding new institutional and trading products.<\/p>\n<p>As previously reported by crypto.news, the exchange recently began allowing eligible users outside the United States to use selected tokenized stocks and exchange-traded funds as collateral for futures and margin trading on Kraken Pro.<\/p>\n<p>The <a href=\"https:\/\/crypto.news\/kraken-lets-tokenized-stocks-power-leveraged-crypto-trades\/\" target=\"_blank\">launch<\/a> covers 10 xStocks assets, including SPYx, QQQx, AAPLx, GOOGLx, TSLAx, NVDAx, HOODx, MSTRx, GLDx and CRCLx, allowing traders to back leveraged crypto positions without selling those holdings.<\/p>\n<p>The collateral initiative follows other recent product launches. In May, Payward <a href=\"https:\/\/crypto.news\/franklin-templeton-and-krakens-payward-team-up-to-tokenize-wall-street\/\" target=\"_blank\">partnered<\/a> with Franklin Templeton to introduce tokenized money market products for collateral and cash management on Kraken. A month later, Kraken and Maple launched an <a href=\"https:\/\/crypto.news\/kraken-launches-institutional-crypto-lending-model-with-maple\/\" target=\"_blank\">institutional crypto lending structure<\/a> using a bankruptcy-remote vehicle for crypto-backed loans.<\/p>\n<p>Founded in 2011, Kraken has also been preparing for a public listing. The company <a href=\"https:\/\/crypto.news\/kraken-confidentially-files-for-an-ipo-volatility\/\" target=\"_blank\">disclosed<\/a> in November 2025 that it had confidentially submitted a draft Form S-1 registration statement to the U.S. Securities and Exchange Commission.<\/p>\n<p>However, reports published in May said the IPO may be delayed until 2027 because of weaker crypto market conditions and ongoing cost-cutting efforts.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p><\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><br \/>\n<br \/><a href=\"https:\/\/crypto.news\/kraken-wins-22m-dollars-blasts-operation-chokepoint-2\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kraken has secured a $22 million arbitration award against its former auditor Mazars USA, with co-CEO Arjun Sethi linking the dispute to what he described as Operation Chokepoint 2.0. Summary Kraken secured a $22 million arbitration award against former auditor Mazars over its withdrawn 2022 audit. Co-CEO Arjun Sethi linked the dispute to Operation Chokepoint [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":21366,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[23],"tags":[],"kronos_expire_date":[],"class_list":["post-21365","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto"],"_links":{"self":[{"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/posts\/21365","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/comments?post=21365"}],"version-history":[{"count":0,"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/posts\/21365\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/media\/21366"}],"wp:attachment":[{"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/media?parent=21365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/categories?post=21365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/tags?post=21365"},{"taxonomy":"kronos_expire_date","embeddable":true,"href":"https:\/\/cryptoted.net\/index.php\/wp-json\/wp\/v2\/kronos_expire_date?post=21365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}