‘Unacceptable’ — Kraken apologizes, scraps Monero withdrawal questions

Kraken exchange co-CEO Arjun Sethi has apologized for emails sent to Monero [XMR] buyers.

The infamous emails contained questionnaires asking XMR buyers to state their employers, proof of income, bank statements, and what they plan to do with the withdrawn funds. 

Part of the email sent by Kraken Support, and widely shared across social networks, including Reddit, read,

We noticed Monero [XMR] withdrawals from your Kraken account. Could you explain the rationale and purpose of these transactions, including the intended use of XMR following withdrawals

Many in the community warned that Kraken is taking the Monero crackdown to “another level,” with some cautioning other users to expect similar questions. 

Following widespread community backlash, Kraken co-CEO responded to the same. He noted that the emails have been withdrawn. 

Kraken’s Sethi: Monero’s XMR stays listed

In an X post, Arjun Sethi clarified that the exchange’s reaction was not based on any required rule, but a false red flag. 

The $XMR emails were ours. They were wrong, unacceptable. No rule required it. 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 added, 

Where your money came from is a fair question. What you do with it after it leaves is not. XMR stays listed. Buy it here, take it home.

Most of Kraken’s operations in the EU, UK, and Canada have banned XMR trading. This is partly due to compliance. In fact, the EU plans to ban crypto custody of privacy coins from mid-2027. 

Still, individual ownership is not outright illegal via self-custody wallets. What’s banned is trading them across regulated venues. 

Kraken U.S is the last platform yet to ban XMR. However, since August, it has placed individual and corporate monthly caps on the privacy coin. Individuals can deposit a maximum of $3,500 worth of XMR and only withdraw up to $1,500 per month. For firms, the limits are $30K and $10K, respectively. 

Impact on XMR’s price

The infamous emails triggered a wave of selling pressure as XMR exchange inflows spiked over the past two days across Kraken and Bitfinex platforms. 

It dragged XMR’s price from the recent high of $659.6 to a low of $564, marking a 14% price pullback. Still, the decline could stop if buyers defend the support zone above $520, in alignment with the exponential moving averages (EMA). 

Final Summary

• Kraken’s co-CEO Sethi said they scrapped the XMR withdrawals, calling it ‘wrong’ and ‘unacceptable.’
• XMR slumped by 14% amid the FUD, but whether Sethi’s statement will renew demand remains unclear.