Kraken briefly restricted access to some customer accounts after a burst of small transfers hit addresses linked to the exchange between Aug. 17 and Aug. 24. The transfers, nearly 12,000 in total, came from wallets that Arkham Intelligence had labeled as belonging to rival exchange HTX, with each payment ranging from a few cents to a few dollars. Kraken said the activity matched a dusting attack, a tactic that uses the open nature of public blockchains to send tiny amounts of funds to unrelated users and create links that can trigger sanctions screening systems. The exchange said its compliance team has already restored user access while keeping the sanctioned funds frozen and working with authorities. HTX said an internal review found no sign that official accounts took part in the transfers, and it is investigating whether the sending wallets were mislabeled or operated by a third party. The report also noted that the U.K. sanctioned HTX in May, while the European Union added it to a trading ban in July that took effect on Aug. 23, during the same period as the attack.
Crypto exchange Kraken briefly locked some customer accounts after wallets labeled by Arkham Intelligence as belonging to rival exchange HTX sent nearly 12,000 small transfers to Kraken-linked addresses between Aug. 17 and Aug. 24.
Each transfer ranged from a few cents to a few dollars. Kraken said the activity was a dusting attack, a tactic that takes advantage of the fact that anyone can send funds on a public blockchain. In Kraken's account, the goal is to link sanctioned funds with unrelated users and trigger sanctions screening systems.
Kraken said its compliance team has restored access for affected users. The exchange added that it is still freezing the sanctioned funds involved and is cooperating with authorities to make sure the attack does not achieve its intended effect.
HTX said its internal review did not find any official accounts involved in the small transfers. It is investigating whether the sending wallets were mislabeled or controlled by a third party.
The timeline overlaps with recent sanctions measures. The U.K. sanctioned HTX in May. The European Union added HTX to a trading ban in July, and that ban took effect on Aug. 23, during the same window in which the transfers occurred.
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