Kraken temporarily restricted some customer accounts after they received tiny crypto transfers from wallets linked to sanctioned exchange HTX.
The exchange has since restored access to the affected accounts, but the incident shows how unsolicited deposits can disrupt sanctions checks and leave innocent users unable to access their funds.
Thousands of small transfers reached Kraken
Around 12,000 transfers reached Kraken-linked addresses between August 17 and 24, according to a Bloomberg report, with most worth between a few cents and several dollars.
Kraken described the activity as a ‘dust attack’ coming from HTX-linked wallets. It believes the transfers were done to spread funds that were sanctioned to other platforms and undermine confidence in their compliance systems.
A ‘dust attack’ normally involves sending small amounts of crypto to a lot of addresses, and in this case, the transfers led to Kraken’s screening controls to flag some receiving accounts, despite these customers not requesting the funds.
Kraken restricted those flagged accounts briefly and investigated, but it later restored the access to the accounts, but it continued to freeze funds connected to the sanctioned wallets.
The transfers came as European restrictions against HTX were taking effect, as reported by AMBCrypto. The European Union’s ban on transactions involving the exchange began on August 23, while the United Kingdom had already sanctioned HTX in May.
HTX denies organizing the transfers
HTX has rejected suggestions that the transfers were part of an official campaign.
Days before Bloomberg’s report, an HTX representative responded to questions on X, about repeated small transfers from a wallet labelled as belonging to the exchange.
The representative said HTX had looked at its internal accounts and found no evidence that the company was responsible for thos activities.
HTX instead suggested that some Kraken customers may have acted on their own after their funds were frozen. The representative claimed the exchange had found a lot of affected users, including one case involving as much as $4.2 million.
There was no evidence that showed a link between those users and the 12,000 transfers, and the $4.2 million claim has also not been confirmed independently.
HTX said it had created a group to collect complaints from Kraken customers but argues that any action taken by users, on their own, should not be attributed to the platform and leave the source of the transfers unresolved.
Final Summary
- Kraken restored accounts that were temporarily restricted after thousands of unsolicited transfers.
- HTX denied official involvement and suggested affected users may have acted on their own.
