Cryptocurrency exchange Kraken has restored access to customer accounts that were temporarily restricted following a series of unsolicited tiny crypto transfers. The incident highlighted how unexpected deposits can trigger automated compliance checks and impact user access.
According to a Bloomberg report, approximately 12,000 transfers reached Kraken-linked addresses between August 17 and 24, with values generally ranging from a few cents to several dollars. Kraken categorized the activity as a 'dust attack' originating from wallets linked to the sanctioned exchange HTX. The exchange stated that the transfers appeared intended to spread sanctioned funds to other platforms and challenge compliance systems.
The transfers prompted Kraken's screening controls to flag the receiving accounts, even though the customers did not request the funds. Kraken briefly restricted the flagged accounts to investigate the activity. While access has since been restored, the exchange maintained freezes on funds directly connected to the sanctioned wallets.
The timing coincided with European restrictions against HTX. The European Union implemented a ban on transactions involving the exchange on August 23, following previous UK sanctions issued in May.
HTX Denies Involvement
HTX has rejected allegations that it orchestrated the transfers. A representative for the exchange addressed the matter on X, stating that an internal review found no evidence that the company was responsible for the activity.
Instead, HTX suggested that individual Kraken customers may have acted independently following the freezing of their funds, noting one unconfirmed case involving $4.2 million. However, no evidence has linked those specific users to the 12,000 transfers, and the claims regarding the $4.2 million have not been independently verified. HTX formed a group to gather complaints from Kraken customers but argued that independent user actions should not be attributed to the platform.
