Kraken Fires Two Staff After Extortion Over Customer Videos

Kraken reported that two support staff improperly accessed customer data and videos on roughly 2,000 accounts, were dismissed, and a criminal group then tried to extort the exchange by threatening to distribute the material. The company stated that its systems were not breached and customer funds were never at risk.

The matter began in February 2025 after Kraken received a tip that a video was circulating on a criminal forum; the employee’s access was immediately revoked. A second employee was removed after another video surfaced more recently. Chief Security Officer Nick Percoco wrote on X that the incidents together affected about 2,000 client accounts, roughly 0.02% of Kraken’s customer base, and emphasized internal systems were not compromised.

Attackers threatened to send the videos to news outlets and post them on social media to force payment. Kraken refused to negotiate or pay the extortionists and is working with cybersecurity specialists and federal law enforcement in multiple countries to identify the perpetrators.

Kraken warned that schemes that recruit or coerce employees at telecommunications firms, gaming platforms and cryptocurrency companies are becoming more common. Those operations use insiders or compromised workers to obtain customer information that criminals then use for blackmail, account takeovers or to enable larger thefts.

Law enforcement has recently pursued large-scale cryptocurrency fraud. A coordinated effort by U.S., U.K. and Canadian agencies, called Operation Atlantic, recovered more than $45 million in stolen funds and froze about $12 million. Investigators focused on approval-phishing tactics used in so-called “pig butchering” scams, identified over 20,000 compromised wallet addresses across 30 countries and took down more than 120 fraud sites. Separately, U.S. authorities announced the seizure of more than $14 billion in Bitcoin tied to a criminal network based in Cambodia.

The security incidents come amid market pressure from geopolitical events and macroeconomic data. After the collapse of peace talks between the United States and Iran in Islamabad, Bitcoin fell below $70,000 and about $350 million in long positions were liquidated. A separate market reaction to a threat to block the Strait of Hormuz coincided with a roughly 3% drop in Bitcoin over two hours. U.S. consumer prices rose 3.3% year over year in March and oil traded near $84 per barrel. Analysts have warned that further escalation could lift inflation and affect the Federal Reserve’s timeline for cutting interest rates.

Kraken has not reported any loss of customer assets and says it will continue to cooperate with authorities and security partners as investigations proceed. Percoco wrote: “Systems were never breached; funds were never at risk; we will not pay these criminals; we will not ever negotiate with bad actors.”