Kraken Files Second Amended Complaint Against Etana Custody in Colorado Court

Payward, Kraken’s parent, says its April 2025 request to withdraw about $25 million was repeatedly delayed before Etana Custody entered Chapter 11, according to a federal complaint in Colorado.

26d ago

Fact Check

All core elements of the claim are confirmed by multiple independent, credible sources. The Block and CoinDesk both report that Payward filed a second amended complaint in U.S. District Court for the District of Colorado on May 4, 2026, alleging Etana Custody misappropriated $25 million in client funds. CoinDesk specifically confirms the April 2025 withdrawal request was stalled by Etana using fabricated reconciliation issues, matching the claim's detail about repeated delays. PANewsLab further corroborates the repeated delays and the federal damages claim in Colorado. The only minor nuance is that The Block and CoinDesk describe Etana's insolvency proceedings as court-supervised liquidation (initiated by the Colorado Banking Board in November 2025), while the claim and some sources reference Chapter 11 bankruptcy. This is a secondary detail that does not undermine the core claim. The $25 million figure, the April 2025 withdrawal request, the Colorado federal court filing, and the damages claim are all consistently confirmed.

Summary

Kraken, through Payward Interactive and Payward Trading and its parent Payward, filed a second amended complaint in the U.S. District Court for the District of Colorado against Etana Custody Limited, Etana Custody Inc., CEO Dion Brandon Russell, and other defendants. Payward alleges misuse of more than $25 million in client funds and says its April 2025 attempt to withdraw about $25 million was repeatedly delayed before Etana Custody entered Chapter 11 proceedings. Payward is seeking at least $25 million in damages. The dispute highlights operational and counterparty risks tied to third-party custody arrangements in the digital asset industry.

Terms & Concepts

Amended complaint: A revised court filing that updates or expands a plaintiff’s original allegations, defendants, or legal claims during ongoing litigation.
Chapter 11 proceedings: A U.S. bankruptcy process that lets a company reorganize under court supervision while continuing operations.
Custody: The safeguarding of client assets by a third party, a core function in crypto markets where service providers hold digital assets or related funds on behalf of users.