Kraken restores accounts after 12,000-transfer ‘dust attack’

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.