Kraken Crypto Exchange Faces Extortion Attempt, No Client Funds at Risk

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Crypto exchange Kraken targeted in extortion attempt but says there was no breach and no client funds at riskFinance

What to know:

  • Kraken said a criminal group is attempting to extort the company by threatening to release videos of internal systems, but no breach occurred, and funds were never at risk.
  • Two insider-related incidents involving unauthorized access to limited support data affected roughly 2,000 accounts.
  • The exchange has notified impacted users, tightened controls and is working with law enforcement on potential arrests.

In this article

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Kraken, a cryptocurrency exchange, is being targeted by a cybercrime group that claims to have videos showing they’ve gained access to internal systems with customer data. The company announced the extortion attempt on Monday.

The company, based in Wyoming, discovered and stopped two unauthorized access attempts by members of its support team. Each incident involved a small amount of customer information.

In a statement on X, Payward and Kraken’s chief security officer, Nick Percoco, confirmed that their systems remained secure, customer funds were never in danger, and they have no intention of paying or negotiating with the individuals responsible for the recent activity.

In February 2025, Kraken learned about a video being shared on a criminal website. We quickly investigated and identified the person responsible, immediately cutting off their access and strengthening our security measures. We then informed a small number of clients who may have been affected.

Kraken recently received a second report and video about the same issue. They identified the person involved, immediately blocked their access, and informed the users who were impacted.

Crypto security breaches keep happening because the industry deals with valuable, easily-moved digital assets, but also has technical flaws and is vulnerable to human error. Once digital assets are stolen, they can be transferred instantly and the loss is often permanent, making them a prime target for criminals. Problems with smart contracts, how private keys are stored, and the security of exchanges create opportunities for hackers, and users are still frequently targeted by phishing scams and other deceptive tactics.

Recent hacks in the crypto world are becoming more complex. Attackers are now using a combination of weaknesses in smart contracts, tricking people, and quickly moving stolen funds to increase the damage they cause.

Attacks like the one on Drift show that hackers are becoming very skilled at exploiting the intricate details of how DeFi systems work and how money flows within them. These attacks are hard to spot as they happen, highlighting the challenges of keeping up with the rapid pace and complexity of the decentralized finance world.

Kraken is a cryptocurrency exchange based in the U.S., run by Payward Inc. It allows users to buy, sell, and trade cryptocurrencies like Bitcoin and Ether, as well as store and earn rewards on their digital assets. Founded in 2011, Kraken serves both individual and professional investors worldwide and provides ways to convert cryptocurrencies into traditional currencies and vice versa. The company is well-regarded for its commitment to security and following regulations in various countries.

The company estimates that roughly 2,000 customer accounts may have been accessed during these two security incidents. While Kraken has a large customer base, these events only impacted a very small percentage – about 0.02% – according to a source familiar with the situation who spoke with CoinDesk.

Shortly after blocking unauthorized access, Kraken received threats from the group responsible, who demanded money to prevent the release of stolen data to the media and online. Kraken has stated it will not give in to these demands.

The exchange also stated it’s collaborating with its partners and law enforcement to look into a larger scheme where people with inside information are being recruited to target companies in the crypto, gaming, and telecommunications industries. They are confident they have enough evidence to find and arrest those involved.

Protecting our clients is our top concern, and we’re dedicated to fighting the increasing danger of people being recruited from within organizations. We continuously improve our security measures to stay ahead of evolving threats,” Percoco stated.

As an analyst following the digital asset space, I’m reporting that Galaxy Digital (GLXY) recently experienced a cybersecurity incident. Thankfully, it appears to have been contained to a specific development environment and, crucially, no client funds or account data were compromised. The firm, founded by Mike Novogratz, has assured that the incident posed no risk to client assets.

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2026-04-13 19:10