Kraken users briefly locked out after a flood of sanctioned crypto transactions

Crypto exchange Kraken briefly locked some customers out of their accounts after wallets labeled by Arkham Intelligence as belonging to rival $HTX, which is under European Union sanctions, sent nearly 12,000 low-value transfers to Kraken-linked addresses.

Arkham data shows transactions from $HTX wallets to other exchanges taking place between Aug. 17 and Aug. 24, though these could have been initiated by users.

Kraken said the transactions, each valued from a few cents to a few dollars, appeared designed to spread sanctioned funds across other platforms and trigger account restrictions when the assets landed in customer deposit addresses.

“We don’t know who is behind these attacks, but they likely expect that if sanctioned funds land in a client account, it triggers a full account lock,” Kraken said in a statement shared with CoinDesk.

$HTX, which counts TRON blockchain founder Justin Sun as an adviser, said an internal review found no official accounts were responsible for related microtransactions. In a post on X, it said it was investigating whether the sending wallet was misidentified or a third party was responsible.