Kraken Freezes Accounts After HTX-Linked Dust Attack Hits Customers

One of the largest cryptocurrency exchanges in the United States, Kraken, temporarily restricted some customer accounts after nearly 12,000 small cryptocurrency transfers from wallets linked to sanctioned exchange HTX reached Kraken-related addresses over eight days.

The transfers, most of which were worth only a few cents to several dollars, occurred between August 17 and August 24, according to a Bloomberg report.

Kraken described the activity as a possible “dust attack” — a tactic in which small amounts of cryptocurrency are sent to large numbers of addresses, potentially triggering compliance reviews or contaminating the transaction histories of unsuspecting recipients.

Kraken has since restored access to affected accounts, while continuing to hold funds it considers subject to sanctions. 

What Kraken Says Happened

According to a Bloomberg report, most of the roughly 12,000 deposits were worth only a few cents to several dollars, arriving over an eight-day span from wallets identified as tied to HTX, the exchange formerly known as Huobi.

Kraken described the activity as a “dust attack,” a tactic in which small amounts of crypto are sent to numerous addresses, later allowing the sender to track fund flows or trigger automated compliance alerts once recipients move the funds. 

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 at the time the transfers were made.

Blockchain analytics firm Arkham Intelligence linked the sending wallet to HTX based on an address the exchange had previously disclosed as part of its proof-of-reserves information. 

HTX has denied directly sending the transfers and said it is investigating whether the wallet was misidentified or used by a third party without its involvement.

Sanctions Pressure on HTX Escalates

The dus attack transfers came as international scrutiny of HTX intensified.

The United Kingdom designated Huobi Global S.A.—the corporate entity tied to the crypto exchange 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 and resources available to entities linked to Russia.

Building on these measures, the European Union added Huobi Global S.A. to its sanctions list as part of its 21st package of sanctions against Russia, adopted on July 23. EU officials stated the package specifically targets cryptocurrency platforms and networks involved in helping Russia circumvent financial sanctions.

A strict transaction ban prohibiting EU citizens and businesses from conducting operations with HTX officially took effect on August 23, 2026.

Why This Matters

The incident shows how a deliberate dust attack can exploit blockchain transparency and automated compliance protocols to disrupt crypto infrastructure.

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