Here’s a more concise and polished rewrite with a sharp, newsroom-style tone:
Court filings allege that PowerTrade flipped Kraken’s account from a surplus of over $6 million to a deficit of roughly $2 million by applying a series of unauthorized “corrections” to trades that had already expired or settled months earlier.
Payward, the parent company of Kraken, has launched legal action against UAE-based derivatives platform PowerTrade, accusing its founders of misappropriating more than $6 million in digital assets and unrealized gains.
“PowerTrade and its co-founders improperly diverted over $6 million of Payward’s assets. We are seeking to recover those funds through legal channels,” a Kraken spokesperson said.
As part of the proceedings, Payward has filed for discovery in a U.S. federal court, requesting information from several U.S.-based financial institutions to support its case, according to a Thursday filing.
The lawsuit claims PowerTrade drained more than $6 million from Payward’s account through a series of unilateral and unauthorized adjustments.
These actions allegedly involved retroactively reversing profitable trades that had been settled months earlier, creating an artificial negative balance and enabling the firm to seize Payward’s collateral.
“Kraken remains committed to taking firm action to help protect the integrity of the crypto industry,” the company said.
Kraken began using PowerTrade for institutional derivatives trading in 2022. The platform, based in El Salvador, was co-founded by Mario Gomez Lozada and Bernd Sischka.
In October 2025, amid falling bitcoin prices and broader market weakness, Kraken grew concerned about PowerTrade’s liquidity and attempted to withdraw its funds, but was unable to do so.
Instead, PowerTrade allegedly carried out around 100 unauthorized “corrections,” shifting Kraken’s account from a $6 million surplus to nearly a $2 million deficit.
Payward warned in the filing that PowerTrade could use the artificially created “debt” to claim its bitcoin collateral.
PowerTrade did not respond to requests for comment by the time of publication.
Update (June 25, 16:45 UTC): Loss figures updated based on revised filing; reference to DIFC freezing order removed.
