Payward Ventures, Inc. et. al. - Consent Agreement and Order

December 23, 2024

STATE OF MAINE
BUREAU OF CONSUMER CREDIT PROTECTION

In re: Payward Ventures , Inc. d/b/a Kraken,
Payward Financial, Inc. d/b/a Kraken,
Payward Guardian, LLC d/b/a Kraken, and
TradeStation Crypto, Inc. (a/k/a Payward Interactive, Inc.) d/ b/a Kraken

Case No. 2024-003

NOW COME the Parties and agree as follows:

CONSENT AGREEMENT AND ORDER

  1. The State of Maine, Bureau of Consumer Credit Protection ("the Bureau") administers the Maine Money Transmitters Act, 32 M.R.S. §§ 6101 et seq., and the Maine Money Transmission Modernization Act, 32 M.R.S. § 6067 et seq. (together, the "Acts"), and rules promulgated under the authority of the Acts, including the Acts' requirements for licensing.
  2. The Bureau has authority pursuant to 10 M.R.S. § 8003(5)(B), 32 M.R.S. § 6123(2), and 32 M.R.S . § 6100-AA to enter into consent agreements with applicants and licensees.
  3. On December 13 , 2022, Payward Financial, Inc. ("PFI") applied to the Bureau for a license to operate as a money transmitter in Maine.
  4. On March 29, 2023, Payward Ventures, Inc. ("PVI") applied to the Bureau for a license to operate as a money transmitter in Maine.
  5. On February 6, 2024, TradeStation Crypto, Inc. (a/k/a Payward Interactive, Inc.) ("PWI") notified the Bureau of a proposed a change in control of its business.
  6. On April 11, 2024, the Bureau accepted PWI's surrender of its Maine money transmitter license and its withdrawal of its notice of change in control.
  7. On April 11, 2024, the Bureau issued an order in which it:
    1. denied PVI's application for licensure, citing it s conclusion that PVI failed to meet the requirements for licensure and that it engaged in unlicensed activity in Maine;
    2. denied PFI's applications for licensure, citing its conclusion that PFI's affiliate PVI engaged in unlicensed activity in Maine; and
    3. denied PWI's notice of change in control on grounds that it would allow the transfer of PVI's clients to an entity under common control with PVI without addressing the Bureau 's conclusion that PVI engaged in unlicensed activity in Maine.
  8. On May 13, 2024, PVI , PFI, PWI, and Payward Guardian LLC (together, "Kraken") filed a notice of appeal from the Bureau's April 11, 2024 Order.
  9. On July 10, 2024, the Bureau issued a Notice of Hearing related to the denial of Kraken's applications.
  10. Kraken and the Bureau are entering into this Consent Agreement and Order in order to economically and efficiently resolve the pending dispute regarding the denial of Kraken's applications.

NOW, THEREFORE, the parties agree to the following resolution:

  1. The Bureau hereby accepts Kraken's withdrawal of its license applications and/or change of control submissions, without prejudice to Kraken's right to refile or resubmit them in the future.
  2. Kraken shall not operate in Maine without first obtaining a license from the Bureau except as necessary to permit customers, clients, or users to move their assets out of Kraken 's platform.
    1. Kraken shall allow its existing Maine clients, customers, and users to transfer their funds out of Kraken's platform for the sole purpose of closing their Maine accounts or reducing their balance with Kraken to zero. Within 30 days following the effective date of this Consent Agreement and Order, Kraken shall provide notice to any apparent owners of funds held in Kraken's platform that such funds must be withdrawn within 90 days or they will be presumed abandoned and escheated to the State of Maine. Kraken shall timely process any requests for customer withdrawals. Funds that are not withdrawn shall be presumed abandoned as of 120 days following the effective date of this Consent Agreement and Order. Thereafter, Kraken shall administer the abandoned funds in accordance with the Maine Revised Unclaimed Property Act, Title 33, ch. 45 and related rules.
  3. This Consent Agreement and Order fully and finally resolves all matters contained herein or in the Bureau's April 11, 2024, order, the terms of which order are replaced and subsumed the provisions of this Consent Agreement and Order. The Bureau shall refrain taking any civil or administrative enforcement action against Kraken, and from encouraging or recommending any criminal proceedings, relating to any alleged unlicensed activity Kraken engaged in within the State of Maine prior to the date of this Consent Agreement and Order where the alleged unlicensed activity to allegations of fraud or other alleged consumer harms. Notwithstanding the foregoing, this Consent Agreement and Order does not prohibit the Bureau from considering alleged unlicensed activity of any nature in the course of determining whether to grant Kraken, or any Kraken-related entity, a money transmitter license if and when Kraken or any such entity were to seek such a license in the future. In the event the Bureau forms an intention to bring any civil or administrative enforcement action relating to any alleged unlicensed activity Kraken engaged in within the State of Maine prior to the effective date of this Consent Agreement and Order where that activity relates to allegations of fraud or other alleged consumer harms, prior to bringing any such enforcement action the Bureau shall provide notice to Kraken of the Bureau's intention to bring any such action, identify the factual basis of the action, and enter into good faith negotiations over a resolution, in advance of bringing any such action.
  4. This Consent Agreement and Order does not constitute an admission by Kraken of any violation of the Acts.
  5. This Consent Agreement and Order shall not limit in any way any action the Bureau may take against Kraken for any violations of the terms of this Consent Agreement and Order or applicable law in the future.
  6. Kraken hereby knowingly, willingly, voluntarily and irrevocably consents to the entry of this Consent Agreement and Order and agrees that it understands all of the terms and conditions contained herein. Kraken, by voluntarily entering into this Consent Agreement and Order, waives any right to a hearing or appeal concerning the terms and conditions set forth in this Consent Agreement and Order.
  7. This Consent Agreement and Order contains the entire agreement between the Bureau and Kraken. There are no other terms, obligations, covenants, representations, statements, conditions, or otherwise, of any kind whatsoever concerning this Consent Agreement and Order. This Consent Agreement and Order may be amended only by a writing signed by the Bureau and Kraken.
  8. This Consent Agreement and Order is entered into by the parties with full opportunity for legal advice from counsel.
  9. Kraken 's representative, by consenting to and approving this Consent Agreement and Order, hereby represents and warrants that the representative has full power and authority to consent to and approve this Consent Agreement and Order for and on behalf of Kraken, and further represents and warrants that Kraken agrees to be bound by the terms and conditions of this Consent Agreement and Order.
  10. Nothing in this Consent Agreement and Order shall be construed to affect any right or interest of any person not a party hereto.
  11. This Consent Agreement and Order may be signed in counterparts, and all counterparts together constitute one original instrument. Signatures below may be applied and/or saved electronically, with such electronic signatures and this entire document being saved electronically and given the same effect as a paper document signed in ink.
  12. Kraken acknowledges and agrees that this Consent Agreement and Order is binding only upon the Bureau and not any other local , state or federal agency, department or office regarding matters within this Consent Agreement and Order.
  13. The effective date of this Consent Agreement and Order is the date that the administrator signs below.
  14. Upon the effective date of this Consent Agreement and Order, the instant proceedings shall be dismissed.

Dated: 10 December 2024
/s/Trevor Rutar
Payward Financial, Inc.
By (print name): Trevor Rutar
Its: CEO

Dated: 11 December 2024
/s/John Trohan
Payward Ventures, Inc.
By (print name): John Trohan
Its: Director

Dated: 10 December 2024
/s/Daniel Stevenson
By (print name): Daniel Stevenson
Its: Secretary of Payward, Inc., its sole member

Dated: 11 December 2024
/s/Jeremy Williams
Payward Interactive, Inc.
By (print name): Jeremy Williams
Its: CEO

Dated: December 13, 2024
/s/Linda Conti
Linda Conti, Superintendent
Bureau of Consumer Credit Protection

Attachments

Consent Agreement and Order (PDF)

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