Wyoming-based cryptocurrency exchange Kraken is facing extortion attempts by a criminal group threatening to release videos of its internal systems, the company announced Monday.
A criminal group is attempting to extort the firm by threatening to distribute footage purportedly showing access to internal systems containing client data, according to the exchange.
Kraken officials stated that no breach of the company's core systems occurred and that client funds were never at risk during the incidents.
"Our systems were never breached; funds were never at risk; we will not pay these criminals; we will not ever negotiate with bad actors," said Nick Percoco, chief security and information officer of Payward and Kraken, in a post on X.
Insider access incidents
The company identified two separate instances of unauthorized access tied to individuals within its support team. These incidents involved limited client data and affected approximately 2,000 accounts.
The first incident occurred in February 2025, after Kraken received a tip regarding a video circulating on a criminal forum. The exchange identified the involved individual, revoked their access, and implemented additional security controls.
A second, more recent incident followed a similar pattern. Kraken identified the responsible individual, terminated their access, and notified the affected users.
Kraken began receiving extortion demands shortly after the most recent access was cut off. The group has threatened to distribute materials from both incidents to media outlets and social media platforms.
According to a person with knowledge of the matter, the security events affected only 0.02% of Kraken's total client base. The exchange has since tightened controls and is working with law enforcement to identify and arrest those responsible.
Percoco noted that the company is also investigating broader insider recruitment efforts targeting firms in the crypto, gaming, and telecommunications sectors.
"The security of our clients is our highest priority, and we remain fully committed to combating the growing global threat of insider recruitment," Percoco added.
