Kraken's parent company, Payward, is suing its former escrow partner, Etana, alleging that it misappropriated $25 million in client funds.

CoinFeed reported on May 4th that, according to CoinDesk, Kraken's parent company, Payward, has filed a second amended complaint in the U.S. District Court for the District of Colorado, formally suing its former custodian partner, Etana Custody, and its CEO, Dion Brandon Russell. The core allegations are that they misappropriated over $25 million in client funds and are suspected of operating a Ponzi scheme. Payward states that during their partnership, Etana Custody violated the custody agreement by commingling client funds with its own funds, failing to use the funds for their designated purposes, and instead misappropriating them to pay for its own operating expenses and engage in high-risk investments. Furthermore, it allegedly concealed the shortfall by falsifying account reports.