PANews reported on May 4 that, according to CoinDesk, Kraken's parent company, Payward, filed a second amended complaint in the U.S. District Court for the District of Colorado, formally suing former custodian partner Etana Custody and its CEO, Dion Brandon Russell, alleging that they misappropriated more than $25 million in customer funds and operated a Ponzi scheme.

Payward stated that Etana Custody violated the escrow agreement during their cooperation by commingling client funds with its own funds, failing to use the funds for their designated purposes as agreed, and instead misappropriating them to pay for its own operating expenses and engage in high-risk investments. Furthermore, it concealed funding gaps by falsifying account reports.

It is reported that Etana Custody, as a cryptocurrency custodian, had partnered with Payward to provide custodian services for client funds. In April 2025, when Payward attempted to withdraw approximately $25 million in reserve funds, Etana Custody repeatedly delayed the process, citing reconciliation issues. Subsequent investigations revealed a funding shortfall of $25 million, and the company was unable to provide a reasonable explanation for the flow of funds, leading to this lawsuit.

Etana Custody had previously faced regulatory scrutiny for compliance issues, while Payward, as a leading custody institution in the crypto industry, has always adhered to compliant operations. This lawsuit is both to protect its own legitimate rights and interests and to safeguard the funds of its partner clients.