Kraken Locks Accounts in Dust Attack Linked to Sanctioned HTX Wallet

Kraken, a major cryptocurrency exchange, temporarily locked some customer accounts after nearly 12,000 tiny transfers from an HTX-linked wallet triggered compliance reviews.

The transfers occurred between August 17 and 24, with most transactions worth only cents or a few dollars. Kraken said the activity appeared designed to distribute sanctioned funds across unrelated accounts and trigger compliance checks.

Kraken restored affected accounts but continues holding disputed funds separately due to potential sanctions violations. The exchange is coordinating with relevant authorities while monitoring additional transfers.

The incident has been described as a 'dust attack', although it differs from traditional dusting tactics, which primarily target wallet privacy. Instead, the activity appears designed to exploit cryptocurrency compliance procedures.