Kraken is facing an extortion attempt by a criminal group threatening to release videos of the exchange's internal systems containing client data, the company announced Monday.
Chief Security Officer Nick Percoco stated on X that the firm will not negotiate with the attackers or pay any undisclosed ransom.
“We will not pay these criminals; we will not ever negotiate with bad actors,” Percoco posted.
According to Percoco, the exchange received a tip that a video was produced showcasing sensitive customer information from internal systems. This follows a February 2025 security incident where a similar video containing customer data appeared on a criminal forum.
Investigation underway
Percoco noted that in previous incidents, the internal individuals involved were identified. He confirmed that no customer funds were at risk and that the exchange's core internal systems were not breached during this latest attempt.
The security executive estimated that approximately 2,000 individuals may have had their information viewed. Kraken has already contacted everyone potentially affected by the incident.
The criminal group is allegedly threatening to distribute the stolen information via social media and local news outlets if their demands are not met. Kraken is currently working with federal law enforcement across multiple jurisdictions to identify and arrest those responsible.
“We are actively working with federal law enforcement across multiple jurisdictions to pursue all individuals involved and bring them to justice,” Percoco said.
This extortion attempt occurs as the cryptocurrency industry faces a rise in physical 'wrench attacks.' A report from CertiK indicates these attacks, which involve physical coercion to steal crypto holdings, jumped more than 75% year-over-year, resulting in over $40 million in losses last year.
Kraken's security challenges follow a similar pattern seen at competitor Coinbase, which reported a major breach late last year after criminals bribed customer support agents to access user details.
