The exchange locked some users out following a dust attack involving nearly 12,000 transfers tied to a sanctioned entity.
Crypto exchange Kraken temporarily froze some customer accounts after detecting nearly 12,000 small transfers from a wallet linked to HTX. The transfers, mostly worth cents or dollars, occurred between August 17 and 24 and were classified as a “dust attack” aimed at spreading sanctioned funds or triggering compliance reviews.
Kraken restored access to affected accounts but continues to hold the sanctioned funds. The wallet was identified by Arkham Intelligence as connected to HTX, which denied initiating the transfers, citing possible address misattribution or third-party activity.
The incident highlights ongoing risks of compliance breaches in crypto transactions, particularly involving sanctioned entities.