Kraken hit by dust attack, accounts temporarily restricted

Kraken restricted accounts after 12,000 small transfers from HTX-linked wallets triggered compliance checks. Most accounts were restored, but sanctioned funds remain frozen. HTX denied involvement and is investigating.

Kraken faced a coordinated dust attack from August 17 to 24, receiving nearly 12,000 small cryptocurrency transfers from wallets linked to HTX. These microdeposits, often worth just a few cents or dollars, triggered Kraken’s compliance protocols and led to temporary account restrictions for affected users. The exchange described the incident as an attempt to spread sanctioned funds and disrupt compliance systems, aiming to cause operational issues and undermine confidence in regulatory controls. Kraken restored access to most accounts after review, but funds directly tied to sanctioned wallets remain frozen. HTX has denied any involvement and is currently investigating the transfers. This incident underscores the challenges centralized exchanges face in balancing regulatory compliance with user experience, as unsolicited deposits can trigger false positives and disrupt legitimate users. Authorities are closely monitoring how exchanges respond to such incidents to ensure robust anti-money laundering measures.