Kraken: 12,000 HTX Dust Transfers Locked Customer Accounts

Roughly 12,000 tiny crypto transfers from wallets tied to sanctioned exchange HTX hit Kraken between Aug. 17 and Aug. 24, tripping the exchange’s sanctions screening and briefly freezing some customer accounts, Bloomberg reported Tuesday. Data from Arkham Intelligence shows most transfers were worth between a few cents and several dollars.

Kraken described the activity as a “dust attack,” a tactic that sends small amounts of crypto to many addresses. A Kraken spokesperson told Bitcoin Magazine the exchange does not know who is behind the transfers. The senders likely expected sanctioned funds landing in a client account to trigger a full account lock and cause operational disruption for a large number of users, the spokesperson said. The compliance team restored access quickly while continuing to hold the sanctioned funds as required, and Kraken is working with authorities.

Blockchain transfers require no permission from the recipient. That means anyone holding sanctioned assets can push them into a stranger’s deposit address and force the receiving platform to respond. The episode shows how automated screening can be abused: a rule that treats any contact with a sanctioned address as meaningful exposure is cheap to exploit.