Kraken's parent company Payward alleges $25 million crypto custody fraud in lawsuit against Etana and firm's CEO

Payward, the parent company of the Kraken crypto exchange, has filed a lawsuit in Colorado against custody partner Etana and its CEO, Dion Brandon Russell. The complaint alleges that Etana operated a "Ponzi-like" scheme, misappropriating over $25 million by commingling customer funds, covering operating expenses, and making risky investments while falsely reporting assets as secure. Kraken claims it discovered the shortfall in 2025 when it attempted to withdraw reserves and was met with delays and fabricated excuses. Etana, currently in bankruptcy proceedings, is accused of using client money for unauthorized hedging and defaulting investments. Kraken is seeking at least $25 million in damages and has named Russell personally, alleging he exercised total control over the fraudulent activities.

(Source：CoinDesk)