Kraken Froze Accounts After HTX-Linked Dust Attack Hit 12,000 Customers

A Kraken spokesperson said the attack appeared to be an attempt to distribute funds subject to UK and European Union sanctions across other platforms and potentially undermine confidence in the crypto industry's compliance systems. The exchange is investigating the transactions and working with authorities. It has not publicly established who controlled the sending wallet when the transfers were made.

The dust transfers came as international scrutiny of HTX intensified.

The United Kingdom designated Huobi Global S.A., the corporate entity tied to HTX, under its Russia sanctions regime on May 26. British authorities determined there were reasonable grounds to suspect Huobi Global S.A. supported the Russian government by offering financial services or making funds available to entities linked to Russia.

The European Union added Huobi Global S.A. to its sanctions list as part of its 21st package of sanctions against Russia, adopted July 23. EU officials stated the package specifically targets cryptocurrency platforms and networks involved in helping Russia circumvent financial sanctions. A transaction ban prohibiting EU citizens and businesses from conducting operations with HTX took effect August 23.

Kraken's compliance freeze shows how a deliberate dust attack can exploit blockchain transparency and automated sanctions screening to disrupt exchange infrastructure. The incident also signals the operational risk exchanges face when sanctioned entities' wallets interact with their platforms through small, hard-to-filter transactions.