TLDRKraken temporarily restricted customer accounts after nearly 12,000 unsolicited crypto transfers hit its platform between August 17 and 24.Arkham Intelligence linked the sending wallet to HTX, but the exchange denied any involvement.Kraken called the activity a dust attack meant to spread sanctioned funds across unrelated accounts.The EU added HTX’s Huobi Global entity to its transaction ban list on August 23, 2026.Kraken restored account access but kept the disputed funds separate from customer balances.Kraken temporarily restricted a group of customer accounts this week after an unusual wave of small crypto transfers reached its platform. Bloomberg first reported the story on August 25, citing data on nearly 12,000 transactions.The transfers arrived between August 17 and August 24. Most were worth only a few cents or a few dollars each.Kraken described the activity as a dust attack. In this case, the goal appeared to be spreading sanctioned funds across many unrelated accounts rather than tracking wallet owners, which is the usual purpose of dust attacks.What Happened to the Affected AccountsKraken restricted the accounts that received the transfers while it reviewed the situation. The exchange later restored access to those accounts once the reviews were complete.However, Kraken kept the disputed funds separate from customer balances. The company said this was because the funds were tied to wallets connected to sanctioned entities.A spokesperson for Kraken said the transfers appeared to come from wallets owned by HTX. The spokesperson added that the funds seemed linked to sanctions imposed by the UK and the EU.Kraken did not say how many accounts were affected. The company also did not share the total value of the funds it is holding separately.Blockchain analytics firm Arkham Intelligence labeled the sending wallet as connected to HTX. This label was based on addresses that HTX had used in past proof of reserves reports.That label does not confirm that HTX controlled the wallet or directed the transfers. It only shows a past connection between the address and the exchange.HTX Denies Sending the FundsHTX pushed back on the claim. A spokesperson said the exchange did not send the transfers and is now looking into what happened.HTX said it is checking whether the mislabeling came from an error, a misunderstanding, or the actions of a third party. The exchange has not shared full wallet records to support its explanation.Other exchanges reportedly saw similar small transfers before Kraken’s issue became public. Coinbase and Binance were both named as recipients of comparable transactions.The timing lines up with recent sanctions activity. The UK named Huobi Global S.A., tied to HTX, as a sanctioned entity back in May.The EU followed with its own restrictions on HTX starting August 23. That rule bans certain crypto firms from processing transactions linked to the exchange.HTX has argued that Huobi Global S.A. is a separate legal entity from its main trading platform. The exchange says the sanctions should not apply to its full operations.Researchers at TRM Labs said HTX changed wallets several times after the UK sanctions took effect. HTX called this normal security practice, not an attempt to avoid the rules.Crypto exchanges generally cannot block incoming transfers before they are screened. This means unwanted funds can land in a customer account without that person doing anything.Stablecoin issuers like Tether have more control since they can freeze tokens directly. Tether froze more than 500 million dollars across 370 addresses during one recent 30 day period.Kraken and HTX have not announced a joint investigation. Any further update would likely need clear wallet evidence or a statement from sanctions regulators in the UK or EU.The post Kraken Restricts Accounts After 12,000 Dust Transfers Linked to HTX appeared first on Blockonomi.