Kraken Says No Funds at Risk Despite Insider Data Breach Attempt and Blackmail Threats

Crypto exchange Kraken has disclosed that it is currently facing extortion attempts from a criminal group threatening to release videos allegedly showing its internal systems with client data.

The company stated that its systems were not breached, no funds were ever at risk, and it will not comply with or negotiate with the attackers.

Insider Access Scandal

In the latest post on X, Kraken’s Chief Security Officer Nick Percoco confirmed that it identified and shut down two separate instances of inappropriate access, which involved limited client support data. The first incident dates back to February 2025, when a trusted source alerted Kraken to a video circulating on a criminal forum that appeared to reveal access to its client support systems. An internal investigation quickly identified the individual responsible as a member of its support team.

The employee’s access was immediately revoked, and a full investigation was conducted. Additional security measures were also implemented, and a limited number of affected clients were notified. Following the incident, the exchange began working with industry partners and law enforcement agencies to address broader insider recruitment efforts targeting crypto firms, as well as companies in the gaming and telecommunications sectors.

More recently, Percoco said that the company received another tip, along with a new video showing similar unauthorized activity. Kraken again identified the individual involved, terminated their access, conducted a full investigation, and notified the small number of affected users. Across both incidents, approximately 2,000 client accounts, which represent about 0.02% of its user base, were potentially viewed.

Shortly after access was revoked in these cases, the company began receiving extortion demands. The attackers threatened to distribute materials related to both incidents to media outlets and on social media platforms if their demands were not met. Kraken reiterated that it will not pay the criminals. Based on intelligence gathered during its investigations and ongoing analysis, the company said there is sufficient evidence to support identifying and arresting those responsible.

The exec said that Kraken is currently working with federal law enforcement agencies across multiple jurisdictions to pursue all individuals involved. Due to the active nature of the investigation, Percoco stated that he cannot disclose further details at this time, but encouraged anyone with relevant information to come forward.

Coinbase Data Breach

Coinbase also faced a major security incident in 2025 in which a hacker behind a large-scale data breach laundered millions in stolen crypto while openly mocking investigators. Unlike Kraken’s internal misuse case, the attack reportedly involved bribed customer support staff who granted unauthorized access to sensitive user data, including identities, account balances, and transaction histories.

The attacker also taunted prominent blockchain investigator ZachXBT through Ethereum transaction messages and posted “L bozo” alongside a meme video.  Coinbase said it refused a $20 million ransom demand tied to the stolen data.

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