Payward, the parent company of Kraken cryptocurrency exchange, has filed a lawsuit against its former custody partner Etana and the company's CEO, Dion Brandon Russell, alleging that they misappropriated over $25 million in client funds. According to the complaint, Etana operated a 'Ponzi-like' scheme where custodial assets were mixed with other assets, spent on operational expenses and risky investments, and falsely reported to clients as secure.
Kraken had entrusted Etana with hundreds of millions of dollars over several years as part of a partnership, but when it tried to withdraw around $25 million in reserve funds in April 2025, Etana allegedly stalled and provided misleading explanations. The lawsuit claims that Etana lacked the funds to meet the withdrawal request and instead relied on new deposits to cover the shortfall. Kraken is seeking at least $25 million in damages and alleges that Etana's CEO exercised near-total control over the company's operations and directed the misuse and concealment of funds.