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Kraken co-CEO Arjun Sethi acknowledged that it was wrong for the exchange to email Monero (XMR) buyers about their employer, the source of their funds and their plans for the coins.He said no rule made them ask those questions.
Kraken has since withdrawn the requests and XMR is still listed. Monero is a privacy coin whose goal is to obscure transaction details on its blockchain.
<h3 id="span-style-font-weight-400-a-young-xmr-client-s-wealth-set-off-the-withdrawal-emails-span">A young XMR client’s wealth set off the withdrawal emails</h3>
Sethi laid out the timeline in a post on X. The email went to clients who bought XMR with their own money and then withdrew it.
<figure style="width: 100%" class="wp-caption alignnone"><img src="https://www.cryptopolitan.com/wp-content/uploads/2026/10/2026-10-24-sethi-kraken-wrong-quiz-monero-buyers-01.png" alt="Sethi says Kraken was wrong to quiz Monero buyers." width="621" height="590">
 <figcaption>
 Arjun Sethi explains the Monero withdrawal emails in a post on <a href="https://x.com/arjunsethi/status/2113816578441810104" rel="noopener noreferrer nofollow">X</a> late on October 23, 2026, US Eastern time.
 </figcaption>
</figure>
“no rule required it,” Sethi wrote. A person working at the exchange saw a young client with a lot of money and called that a red flag, he said.
“that is not a red flag. that is our customer and client,” Sethi wrote, adding, “those requests are withdrawn and the clients have been told nothing is required of them.”
He said the question “what will you do with your coins” is unacceptable and is gone. “where your money came from is a fair question. what you do with it after it leaves is not,” he wrote.
Sethi concluded the post with a thank you to critics for “the call out.”
<h3 id="span-style-font-weight-400-source-of-funds-checks-stay-as-xmr-remains-listed-span">Source-of-funds checks stay as XMR remains listed</h3>
Kraken said that it may ask for source-of-funds documents to show where the money for a certain transaction came from because of laws that are against money laundering.
According to Kraken’s information request policy, recently amended on October 1, unanswered inquiries may result in frozen deposits and trading. There is no impact on withdrawals.
“xmr stays listed. buy it here, take it home,” Sethi wrote. XMR is down approximately 5% over 24 hours and was trading around $581 on Kraken early Saturday.
Kraken does not accept XMR deposits and trades for users in the European Economic Area and the UK, and users in Canada and Australia cannot deposit, hold or trade it.
The walk-back comes days after on-chain investigator ZachXBT flagged FreedomXMR, a service on Hyperliquid Core, as a laundering venue, <a href="https://www.cryptopolitan.com/zachxbt-freedomxmr-hyperliquid-laundering/" rel="noopener noreferrer nofollow">Cryptopolitan</a> reported. He traced some $20 million from exploit wallets to privacy coins via the service.
ZachXBT said more than 87% of inflows to FreedomXMR were linked to illicit activity. Most centralized exchanges limit XMR trading because of US or European rules.
Payward, the parent of Kraken, signed an agreement on Oct. 14 to buy Lithuania-licensed <a href="https://www.cryptopolitan.com/saldo-bank-kraken-payward-eu-bank-2027/" rel="noopener noreferrer nofollow">Saldo</a> Bank and procure an EU banking license. The agreement is subject to regulatory approval and is expected to close in 2027.
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Kraken co-CEO admits quizzing Monero buyers about their coins was a mistake

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