Kraken touted its role in 'Operation Atlantic,' claiming to have helped recover $45 million in criminal proceeds. Hours later, on-chain detective ZachXBT tore into the exchange, accusing it of listing a blatantly manipulated token. The token in question: $M (Memecore), which Kraken added for spot trading on July 3, 2025. ZachXBT published evidence showing insiders had pumped $M's fully diluted valuation (FDV) to an absurd $18 billion, with Kraken being one of the few major platforms providing liquidity.
Self-Praise Meets Reality Check
On April 20, 2026, Kraken posted a self-congratulatory message on social media, detailing its participation in a global law enforcement operation that identified over $45 million in criminal proceeds and protected more than 20,000 potential victims. 'Protecting clients isn't just a regulatory obligation — it's how we operate,' the exchange stated. The post quickly drew fire from ZachXBT, who quoted it and asked Kraken's leadership directly: 'How did this token pass your internal due diligence?'
According to ZachXBT's investigation, $M was a textbook case of insider manipulation. Insiders artificially inflated its market cap to $6 billion and its FDV to a staggering $18 billion. The project's touted 'achievements' were limited to a meager $66 million in total Launchpad trading volume and thousands of 'disposable users' bought through incentivized InfoFi campaigns — no real ecosystem progress.
On-Chain Proof: Team Dumped Tokens on Listing Day
ZachXBT shared three detailed on-chain transaction screenshots and fund flow diagrams. One address (0x6f1f…), believed to be controlled by the Memecore team, received 200 million $M during the token generation event (TGE). On the very day Kraken announced the listing, that address moved 5.3 million $M into two Kraken deposit wallets.
After the listing, Kraken saw $7.9 million in unusual withdrawals, with funds funneled into 18 newly created blockchain addresses. ZachXBT publicly listed all 18 addresses, noting they currently hold 11.7 million $M — worth roughly $39.8 million at then-current prices.
'Protecting Clients' or Double Standards?
The exposé not only unmasks the Memecore team but also damages Kraken's compliance image. The exchange that loudly touts its cooperation with law enforcement to catch scammers is now accused of listing a centrally manipulated token that hooks retail investors. Kraken has yet to respond to ZachXBT's allegations and on-chain evidence.