Payward, the parent company of cryptocurrency exchange Kraken, has filed a lawsuit against PowerTrade, a highly leveraged derivatives platform based in the United Arab Emirates, claiming that the company’s founders embezzled $7.2 million in digital assets and unrealized gains from Kraken.
“PowerTrade and its co-founders misappropriated $7.2 million in digital assets and unrealized earnings from Payward. Payward’s legal proceedings seek the return of these funds,” a Kraken spokesperson said in an emailed statement to CoinDesk.
As such, Payward filed a request in a U.S. federal court to obtain information from various U.S.-based financial institutions regarding PowerTrade and its co-founders in order to facilitate legal proceedings against them, according to a filing Thursday.
The lawsuit claims that PowerTrade improperly withdrew more than $6 million from Payward’s PowerTrade account through a series of unilateral and unauthorized transactions.
These transactions included retroactively reversing Payward’s profitable trades that had been closed or settled months earlier as part of an effort to create a negative balance in Payward’s trading account and abscond with Payward’s collateral, according to the filing.
“We have already obtained an interim global freezing order from the DIFC. [Dubai International Financial Centre] The courts have filed lawsuits against PowerTrade and its co-founders and have initiated other legal proceedings in other jurisdictions,” the Kraken spokesperson said.
