Chechetkin v. Payward Ltd (Kraken) – Settlement in Landmark Case
Thomas Hulme, a Senior Associate in Mackrell.Solicitors Commercial Disputes and Litigation team, has successfully negotiated a settlement in the sum of £594,720-00 on behalf of Maxim Chechetkin in his claim against Payward Ltd, commonly known as the Kraken Exchange (Kraken).
Mr Chechetkin’s claim sought to recover the monies he deposited with Kraken, which were taken by Kraken as a result of a number of digital assets trades that went the wrong way for Mr Chechetkin and resulted in a ‘margin call’.
As has been widely reported, the parties were recently embroiled in a high-profile English High Court dispute regarding Kraken’s enforcement of an Arbitration Award issued in the San-Francisco seated JAMS (Judicial Arbitration and Mediation Services), which it had obtained against Mr Chechetkin after Mr Chechetkin commenced his claim in England (which was stayed pending resolution of the JAMS Arbitration).
Mr Chechetkin successfully argued that Kraken’s enforcement of its Arbitration Award would be contrary to public policy under the Consumer Rights Act 2015. This decision of the High Court allowed Mr Chechetkin to pursue his claim in the courts of England.
Judgment: https://www.bailii.org/ew/cases/EWHC/Comm/2023/1780.html
Mr Chechetkin instructed Thomas Hulme to pursue his UK claim for the recovery of the deposited sums and compensation against Kraken.
Upon instruction, Mr Hulme articulated the claim against Kraken for breach of the rules in the Financial Services and Markets Act 2000 (FSMA) relating to contracts for difference (CFDs) and David McIlroy, Head of Forum Chambers, was instructed to re-pleaded the case to include a claim for breach of the rules in FSMA relating to consumer credit law.
Mr Chechetkin’s claim against Kraken alleges a breach of FSMA by selling products that were tantamount to a Specified Investment, in particular, Contracts for Difference or an agreement providing consumer credit. Consequently, Chechetkin claimed that the monies paid to the exchange must be returned to him.
As a result of his claim, Kraken has now agreed to pay Mr Chechetkin £594,720-00 and his legal costs.
On the successful conclusion of his claim Mr Chechetkin commented that: “Throughout the legal proceedings, I have been impressed by the unwavering dedication and professionalism demonstrated by Mackrell. Solicitors under the guidance of Thomas Hulme, a Senior Associate in their Commercial Disputes and Litigation team.
“The expertise and commitment exhibited by Mr. Hulme in negotiating and securing a successful settlement against Kraken have been exemplary. Mr. Hulme’s strategic input, from the pre-action stage through to the final resolution of the case, has been instrumental in achieving a favourable outcome.
“I highly commend Mackrell. Solicitors and, in particular, Mr. Thomas Hulme for their exceptional legal and technical knowledge of the crypto-world and commitment to their clients.”
If you have paid for digital assets on an exchange, and if that exchange offered to lend you credit to purchase those digital assets, you may have a claim to recover any lost sums. Please contact Thomas Hulme by calling 0207 240 0521 or emailing thomas.hulme@mackrell.com if you consider you have a claim.
