Kraken Sues Derivatives Platform PowerTrade, Alleges Improper Use of Funds

Court filings allege that PowerTrade shifted Kraken’s account from a surplus of more than $6 million to a roughly $2 million deficit by applying unauthorized “corrections” to trades that had already expired or settled months earlier.

Payward, Kraken’s parent company, has filed suit against UAE-based derivatives platform PowerTrade, accusing its founders of misappropriating over $6 million in digital assets and unrealized gains.

“PowerTrade and its co-founders improperly diverted more than $6 million of Payward’s assets. We are seeking to recover those funds,” a Kraken spokesperson said.

As part of the legal effort, Payward has petitioned a U.S. federal court for discovery from several U.S.-based financial institutions to support its claims, according to a Thursday filing.

The complaint alleges that PowerTrade drained funds through a series of unilateral, unauthorized adjustments, including retroactively reversing profitable trades that had already settled months earlier.

These actions allegedly created an artificial negative balance, allowing the firm to seize Payward’s collateral.

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

Kraken began using PowerTrade for institutional derivatives trading in 2022. The platform, operating out of El Salvador, was co-founded by Mario Gomez Lozada and Bernd Sischka.

In October 2025, amid a downturn in bitcoin and broader markets, Kraken raised concerns about PowerTrade’s liquidity and attempted to withdraw its funds but was unable to do so.

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

Payward warned the court that PowerTrade may attempt to use the artificially created “debt” to claim its bitcoin collateral.

PowerTrade did not respond 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.