Kraken said some customer accounts were briefly locked after a series of tiny crypto transfers from wallets it identified as linked to HTX reached Kraken-related addresses over the past week.

According to a Bloomberg report published August 25, roughly 12,000 small transfers were sent between August 17 and August 24. Most of the transactions were worth only a few cents to several dollars, but Kraken said they were enough to trigger compliance concerns tied to sanctioned funds.

Wave of small transfers flagged by Kraken

Kraken said the transfers came from wallets connected to HTX, an exchange it described as sanctioned. The activity was detected across Kraken-related addresses and led to temporary restrictions on some customer accounts.

The exchange characterized the incident as a dust attack, a tactic in which very small amounts of cryptocurrency are sent to other wallets. Such transfers can be used to interfere with transaction records or complicate compliance monitoring.

Exchange says the aim was to trip AML systems

In Kraken's account, the apparent purpose of the transfers was to place sanctioned funds into customer wallets so the exchange's anti-money-laundering controls would be activated. Kraken said the attack appeared designed to spread funds sanctioned by the U.K. and the European Union onto other platforms.

A Kraken spokesperson said the attackers may have expected that once sanctioned funds entered user accounts, those accounts could be locked in full. That, the company said, could also erode confidence across the industry by creating operational disruption for unrelated users.

Affected access has been restored

Kraken said account access has now been restored for impacted customers. At the same time, it said the sanctioned funds themselves remain frozen in accordance with regulatory requirements.

The exchange added that it is working with relevant authorities in an effort to contain any further damage. Kraken did not, in the cited report, provide a wider figure for the number of users affected.

What is confirmed so far

The confirmed timeline in the report runs from August 17 through August 24 for the transfers, with Bloomberg reporting the details on August 25. The reported volume was about 12,000 transactions, most of them very small in value.

Beyond that, several points remain framed as Kraken's assessment rather than independently verified findings. The company has publicly identified the transfers as a dust attack and said the objective appeared to be the disruption of AML controls through the distribution of sanctioned funds.

Source: en.bloomingbit.io