Kraken Restricts Accounts Amid Wave of Small Crypto Transfers Linked to Sanctioned Exchange

Kraken temporarily restricted customer accounts after nearly 12,000 small crypto transfers hit its platform between August 17 and 24. The transfers were worth a few cents or dollars each and were described as a 'dust attack' meant to spread sanctioned funds across unrelated accounts.

The sending wallet was linked to HTX by blockchain analytics firm Arkham Intelligence, but the exchange denied any involvement. Kraken said it kept the disputed funds separate from customer balances due to their connection to sanctioned entities.

HTX had previously been tied to sanctions imposed by the UK and EU, with the EU adding its Huobi Global entity to its transaction ban list on August 23. Other exchanges like Coinbase and Binance reportedly saw similar small transfers before Kraken's issue became public.