Popular U.S. exchange with Fed master account faces criminal extortion

Kraken, a popular crypto exchange based in the U.S., has revealed that it has been facing extortion threats from a group of criminals.

Nick Percoco, chief security officer at Kraken, disclosed on Apr. 13 that a criminal group is extorting the crypto exchange by threatening to release videos of internal systems which allegedly contain client data.

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Percoco reveals 2 similar incidents at Kraken

Percoco said the company identified and shut down "two instances of inappropriate access to limited client support data."

The first incident took place in February 2025 when a video apparently revealing client support systems was circulating on a criminal forum and an investigation identified the individual as a member of its support team.

The access of the identified member was revoked immediately, additional security controls were activated, and "a limited number" of affected clients were notified, Percoco revealed.

Another incident, with a similar chain of events, came to light recently, and Kraken notified the "small number" of affected clients, he added.

Only a "very small" number of client accounts were potentially exposed, the chief security officer said and claimed approximately 2,000 in total, accounting for 0.02% of Kraken's clients, got affected.

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Kraken faces extortion demands

Following these incidents, Kraken began to receive extortion demands from criminals who threatened to release videos from both incidents to media outlets and social media if the exchange didn't comply, he shared.

Kraken is working with federal law enforcement across multiple jurisdictions to pursue those involved and believes there is sufficient evidence to support the identification and arrest of these criminals, the executive underlined.

He said he can't reveal more details right now due to the ongoing investigation but encouraged anyone with relevant information to contact Kraken directly.

Percoco tried to reassure the Kraken users by claiming that the systems were never breached, and funds were never at risk. Neither will Kraken pay these criminals, nor will it ever negotiate with bad actors, he added.

Founded in 2011, Kraken is a U.S.-based crypto exchange that offers spot and derivatives trading services to both retail and institutional clients. Last month, it became the first crypto company to be granted the Federal Reserve Bank of Kansas City's master account.

The move signified the growing institutional acceptance of digital asset companies in the U.S. However, it triggered a backlash from the banking industry.

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