Wallets linked to sanctioned exchange HTX sent roughly 12,000 small crypto transfers to Kraken-related addresses between Aug. 17 and Aug. 24, deposits that tripped the exchange’s sanctions screening and briefly locked some customers out of their accounts, Bloomberg reported Tuesday, citing Arkham data. Most of the transfers were worth between a few cents and several dollars, according to Bloomberg, which cited data from Arkham Intelligence and first reported the incident.

Kraken reportedly described the activity as a “dust attack,” a tactic that involves pushing tiny amounts of crypto into large numbers of addresses. A Kraken spokesperson told Bitcoin Magazine that the exchange does not know who is behind the transfers but that 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 that Kraken is working with authorities.

This story is an excerpt from the Unchained Daily newsletter.

Blockchain transfers require no permission from the recipient, so anyone holding sanctioned assets can push them into a stranger’s deposit address and force the receiving platform to act. That turns automated screening into an attack surface: a rule that treats any contact with a sanctioned address as meaningful exposure is cheap to abuse.

The transfers straddled the date HTX became off-limits in Europe. The EU adopted its 21st Russia sanctions package on July 23, listing HTX, identified in the regulation as Huobi Global SA, among third-country crypto service providers accused of frustrating existing restrictions, with the transaction ban taking effect Aug. 23. Binance halted processing of transactions involving HTX and 10 other listed platforms on the same date.

HTX has disputed the attribution. A spokesperson reportedly said the exchange is investigating and that the source of the transfers may have been misidentified or may reflect malicious action by a third party. The UK separately sanctioned Huobi Global S.A. in May over alleged Russia ties, after which an HTX said that entity was distinct from the trading platform. TRM Labs has said HTX rotated hot wallets and funding addresses following the UK action.

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