Kraken said nearly 12,000 small crypto transfers from a wallet linked by Arkham Intelligence to HTX were sent to Kraken-linked addresses between August 17-24, triggering compliance reviews and temporary account restrictions for some users.

Kraken described the activity as a “dust attack,” potentially aimed at spreading sanctioned funds across platforms and triggering account freezes.

Most transfers were worth only a few cents or a few dollars. Kraken has restored access to affected accounts while continuing to hold the sanctioned funds and working with authorities.

HTX denied initiating the transfers and said it is investigating, citing possible address misattribution or malicious third-party activity.

The incident highlights a broader challenge for crypto compliance: users cannot prevent unwanted funds from being sent to their wallets, meaning attackers can potentially manipulate transaction histories and trigger costly compliance procedures.

The tactic has precedent. Following the 2022 U.S. sanctions on Tornado Cash, small amounts of ETH were similarly sent to prominent wallets without their owners’ consent.

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