Kraken freezes accounts as $133M crypto heist trail runs through EU

Kraken says it has locked down accounts tied to a suspected crypto theft of more than $133 million and is working with law enforcement on recovery. The exchange says the breach didn't start on its platform — but the money allegedly passed through anyway. Kraken is now investigating alongside the authorities.

Blockchain sleuth ZachXBT first flagged the losses publicly on Monday, pegging them at $106 million. By Tuesday he had bumped that figure by $27 million after spotting fresh withdrawals from centralized exchanges — some of them happening after his first warning went out. Per ct.com, he says a large financial institution in Western Europe was likely the target and is being covered up. The victim's identity and the cover-up claim remain unverified.

The trail runs through more than one name. Bitquery reported that the suspect funds were pulled from accounts at Kraken, Crypto.com and OKX. In roughly four hours, $62.98 million in stablecoins got swapped into 27,553 Ether. Crypto.com says it blocked any funds from this third-party incident from moving through its platform, and that user funds are safe. OKX said it's looking into it.

Kraken is pushing back on any suggestion its own defenses failed: no customer accounts were hijacked, no security systems were compromised, and it sees no ongoing risk to users, it told Cointelegraph. The exchange stressed the incident originated elsewhere.

By 13:47 UTC Monday, around $78.3 million still sat in wallets linked to the suspected attacker, while $30.5 million had already moved out of tracked addresses, according to Bitquery. Just $3.74 million remained in USDC that Circle could still freeze — Tether had already frozen $1.1 million in USDT.

Investigators say the attacker has been swapping funds into Ether and Monero through instant exchanges and cross-chain bridges. ZachXBT said the laundering patterns don't look like the usual work of North Korea's Lazarus Group. He also claims the absence of an official incident disclosure let more than $30 million slip away that EU law enforcement could otherwise have frozen. Watchdog and law enforcement efforts are ongoing.