Kraken Foils 'Dust Attack' with Temporary Account Freeze

Kraken exchange recently suspended access to over 12,000 customer accounts following a massive influx of tiny cryptocurrency transfers from wallets linked to sanctioned exchange HTX. The 'dust attack' involved sending small amounts of crypto to Kraken-linked addresses between August 17 and 24, with most worth between a few cents and several dollars.

Kraken temporarily restricted the affected accounts as its screening controls flagged them for further investigation, despite these customers not requesting the funds. However, after verifying that the transfers were unsolicited, the exchange restored access to the accounts.

The incident highlights how unsolicited deposits can disrupt sanctions checks and leave innocent users unable to access their funds. Kraken believes the transfers were done to spread sanctioned funds to other platforms and undermine confidence in their compliance systems.