Kraken Restricts Accounts Amid Wave of Sanctioned Wallet Transfers

Kraken temporarily restricted customer accounts after nearly 12,000 small cryptocurrency transfers from an HTX-linked wallet reached Kraken addresses between August 17 and 24. The transfers, characterized as a 'dust attack' by Kraken, aimed to spread sanctioned funds across unrelated accounts and trigger compliance reviews.

The affected customers had their access restored, but the disputed funds were retained separately due to their connection to HTX's Huobi Global entity, which is under EU restrictions. According to Arkham Intelligence, the sending wallet was linked to HTX using addresses previously identified through the exchange's proof-of-reserves disclosures.

However, HTX denied initiating the transfers and attributed the misattribution or possible malicious third-party activity to an address-labeling error or operational misunderstanding.