News linked to both this project and an event.
According to CoinDesk, cryptocurrency exchange Kraken was extorted by a criminal group that threatened to publicly release videos of its internal systems. Kraken stated that it had previously identified and addressed two incidents involving unauthorized access by internal personnel, affecting limited customer data from approximately 2,000 accounts—0.02% of its total user base—but emphasized that its systems were never breached and customer funds remained secure at all times. Nick Percoco, Kraken’s Chief Security Officer, explicitly affirmed the company would not capitulate to criminals. Kraken has notified affected users, enhanced security controls, and is cooperating with law enforcement authorities to advance the investigation; it believes existing evidence is sufficient to identify and apprehend those responsible. Separately, Galaxy Digital recently experienced a similar cybersecurity incident, though it likewise resulted in no loss of customer funds or data.
According to Reuters, Kraken has become the first cryptocurrency exchange approved for a Federal Reserve master account. However, the account is restricted: it only permits Kraken’s banking operations to access the Fedwire payment system and hold limited balances—earning no interest and ineligible for emergency lending. This move has raised concerns in the U.S. financial system regarding risk and transparency, including a call from Maxine Waters, Chair of the House Financial Services Committee, for greater disclosure of account details. Regulatory experts warn that lightly regulated crypto firms gaining direct access to the Federal Reserve’s payment system could pose operational and financial stability risks. The Federal Reserve stated that these restrictions are intended to mitigate liquidity shocks and credit risk; however, banks caution that they may impair banking system liquidity and exacerbate money laundering and operational vulnerabilities. Kraken says its bank reserves are fully backed and that it complies with bank-level anti-money laundering (AML) and customer identification requirements.