Payward Sues Etana Custody Over Alleged $25M Ponzi Scheme

Payward, the parent company of cryptocurrency exchange Kraken, has filed a lawsuit against its crypto custodian Etana Custody, alleging that Etana misappropriated $25 million in client funds and operated a 'Ponzi-like' scheme.

The lawsuit claims that Etana commingled customer reserves with operational funds and issued false account statements. Payward alleges that Etana's actions were a breach of trust and a violation of its fiduciary duties as a custodian.

Meanwhile, Payward has completed the acquisition of Bitnomial, a crypto-native derivatives platform licensed by the US Commodity Futures Trading Commission (CFTC). This deal gives Payward what it calls the full US derivatives infrastructure stack, comprising a Futures Commission Merchant (FCM), a Designated Contract Market (DCM), and a Derivatives Clearing Organization (DCO).