Dust Attack on Kraken: Sanctions Screening Freezes 12,000 Accounts

Kraken received almost 12,000 tiny deposits between August 17 and August 24, 2026, from wallets that blockchain analytics firm Arkham Intelligence attributes to the sanctioned exchange HTX. The amounts ranged from a few cents to a few dollars. The exchange's automated sanctions screening temporarily froze affected accounts until the checks completed. Access has since been restored, with only the flagged funds still held back, Kraken said.

A Kraken spokesperson told Bloomberg the exchange did not know who was behind the transfers. The senders probably counted on sanctioned funds in a customer account triggering a full account freeze and disrupting operations for many users, the spokesperson said. HTX denies any involvement and says it is examining whether faulty address attribution, an internal process error, or third-party actions caused the transfers.

The technique is known as a dust attack. It sends negligible amounts to trigger compliance checks. In this case, the sender's origin on a sanctions list made the recipient a compliance problem without any action on the customer's part.

Regulation (EU) 2026/1848 added "HTX (HUOBI GLOBAL SA)" to Annex XLV of the Russia sanctions regulation, with an application date of August 23, 2026. From that date, transactions with the platform are prohibited for EU persons and companies. The United Kingdom had already listed Huobi Global S.A. on May 26, 2026, under the Russia (Sanctions) (EU Exit) Regulations 2019. These two legal acts are the reason a payment of a few cents can trigger a freeze.

Kraken continues to hold back about $4.2 million from the episode, according to reports from several trade publications. The exchange has not publicly confirmed the figure, and at least one newsroom flags it as not independently verified. Treat the number as an order of magnitude, not an audited balance sheet item.

The separation matters: account access and flagged funds are handled separately. The remaining balance stays tradable, the marked portion does not. In the worst case, a freeze does not automatically affect your entire wealth, but the marked portion can lie idle indefinitely as long as the legal position is unresolved.

If an unexplained tiny amount appears in your wallet, one rule applies: leave it alone. The dust does no damage as long as it stays untouched. It becomes dangerous the moment you spend it together with the rest of your holdings, because the blockchain then permanently links the dust's origin to your other funds.