Kraken co-CEO Arjun Sethi has publicly walked back the exchange’s questioning of Monero customers, admitting that emails asking buyers about their employer, source of funds, and plans for withdrawn XMR were wrong and were not required by any rule. The statement, posted on X late on October 23 or October 24, came after a public call-out over the messages.
Sethi explained that the emails had been sent to clients who bought Monero (XMR) with their own money and then withdrew it. He said no rule required it and traced the trigger to a single judgment call: someone saw a young client with a lot of money and called it a red flag. That is not a red flag. That is our customer and client, he wrote.
The exchange has now withdrawn the requests and told affected clients that nothing is required of them. The question about what customers would do with their coins after withdrawal is gone and unacceptable, Sethi wrote. At the same time, he drew a compliance line: Where your money came from is a fair question. What you do with it after it leaves is not.
Kraken confirmed that XMR remains listed. XMR stays listed. Buy it here, take it home, Sethi wrote. The exchange’s information request policy, amended on October 1, says unanswered inquiries may result in frozen deposits and trading, but no impact on withdrawals.
The walkback unfolds amid continued scrutiny of privacy coins. On-chain investigator ZachXBT recently flagged FreedomXMR, a service on Hyperliquid Core, as a laundering venue, saying more than 87% of inflows were linked to illicit activity and tracing about $20 million from exploit wallets to privacy coins. Kraken itself does not accept XMR deposits and trades for users in the European Economic Area and the UK, while users in Canada and Australia cannot deposit, hold or trade it.
Market data varied by timing: XMR was reported around $581 early Saturday after being down roughly 5% over 24 hours, while later CoinGecko data showed Monero near $602 with a market capitalization of about $11.3 billion, up roughly 2% over the prior 24 hours and about 11.5% over the prior week. The token remained below its January 2026 record near $798.
Kraken’s parent Payward signed an agreement on Oct. 14 to buy Lithuania-licensed Saldo Bank and procure an EU banking license, a transaction subject to regulatory approval and expected to close in 2027. The correction is limited to Kraken’s own conduct and does not change the broader regulatory environment for privacy coins.
