Payward, the parent company of the cryptocurrency exchange Kraken, has filed a lawsuit against its former partner Etana and its CEO, Dion Brandon Russell, alleging that they misappropriated over $25 million in client funds. According to the complaint, Etana operated a scheme in which it mixed client assets, used them for operational expenses and risky investments, and provided false reports to clients.
Kraken had entrusted Etana with hundreds of millions of dollars over several years as part of a partnership, but when it tried to withdraw $25 million in reserve funds in April 2025, Etana stalled and provided misleading explanations. The complaint alleges that Etana relied on new deposits to cover shortfalls and lacked the funds to meet the withdrawal request. Kraken's head of litigation, Matt Turetzky, stated that the company will pursue justice and hold those responsible accountable.
Etana did not respond to a request for comment. The case highlights the issue of counterparty risk in cryptocurrency markets, where users rely on exchanges, lenders, and custodians to safeguard their funds. The lack of standardized controls and oversight in the crypto industry makes it difficult to verify whether assets are fully backed. The lawsuit against Etana is the latest example of a cryptocurrency company facing allegations of misusing client funds.
Kraken is seeking at least $25 million in damages, as well as potential treble damages and injunctive relief.