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Kraken Won't Pay Its Extortionists

Kraken Won't Pay Its Extortionists

Plus: 📜 Tillis moves to end the stablecoin yield standoff | 📈 Bitcoin hits four-week high on Iran peace hopes | ⚖️ SEC carves out broker-dealer exemption for crypto wallet interfaces

Margaret Kuria & David Okoya
April 14, 2026

Hi! In today’s edition:

🔒 Kraken discloses extortion attempt after two insider incidents exposed about 2,000 client accounts; exchange is working with federal law enforcement
📜 Senator Thom Tillis plans to release stablecoin yield draft language this week, targeting a Banking Committee markup in late April
📈 Bitcoin surged more than 5% to a four-week high near $74,900 on reports of renewed US-Iran peace talks
⚖️ SEC staff say certain self-custodial wallet interfaces don't need broker-dealer registration, in interim guidance valid for five years

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Kraken Refuses to Pay Criminal Extortion Group Threatening Data Leak

Crypto exchange Kraken disclosed Monday it's being extorted by a criminal group threatening to release videos of internal systems showing client data unless the company complies with their demands. Chief Security Officer Nick Percoco said the exchange will not negotiate. "We will not pay these criminals; we will not ever negotiate with bad actors," Percoco posted on X.

The extortion follows two separate insider incidents involving unauthorized access to limited client support data, one traced back to February 2025, and a second identified more recently. Across both events, approximately 2,000 accounts (0.02% of Kraken's client base) were potentially viewed. After Kraken terminated access in both cases, the criminal group began sending ransom demands.

Percoco said Kraken is collaborating with federal law enforcement across multiple jurisdictions and believes it has sufficient evidence to identify and arrest those responsible. The exchange is also working with industry partners to investigate what it describes as coordinated insider recruitment campaigns targeting crypto, gaming, and telecom firms. Galaxy Digital separately disclosed it recently contained a cybersecurity incident involving unauthorized access to a development workspace.

Sen. Tillis to Release Clarity Act Draft to Resolve Stablecoin Yield Fight This Week

Senator Thom Tillis (R-NC) plans to release revised draft language on stablecoin yield and rewards provisions in the Clarity Act this week, according to a Politico report, as the Senate Banking Committee targets a markup in the second half of April. The draft is the product of months of work between Tillis and Senator Angela Alsobrooks (D-MD).

Tillis and Alsobrooks reached an agreement in principle in March to resolve the clash between banks and the crypto industry over stablecoin yield. Politico did not include specific details on what the revised proposal would contain.

The most recent Clarity draft bans passive yield on stablecoin balances — rewards simply for holding a token — while permitting activity-based incentives tied to payments, transfers, and platform use. Neither side is fully satisfied. Coinbase told Senate staff it could not support the current language after reviewing an earlier draft, and banking representatives have pushed for tighter restrictions.

Senator Bernie Moreno has warned that missing the April markup window risks delaying crypto legislation until after the midterm cycle. Polymarket bettors see a 59% chance of the Clarity Act being signed into law in 2026, down from highs above 80% earlier this year.

Bitcoin Surges Above $74,000 on US-Iran Peace Talk Hopes

Bitcoin climbed more than 5% on Monday to a four-week high near $74,900 before settling around $74,300 to $74,500, driven by renewed optimism that the US and Iran may resume negotiations. The move came after President Trump signaled that contact had been made with Iran, reversing a sharp sell-off triggered over the weekend when peace talks collapsed and Trump ordered a US naval blockade of the Strait of Hormuz.

The rally triggered a short squeeze, with crowded bearish positions getting wiped out as buyers stepped in near $70,000 support. Trading volume surged roughly 80% to $51.25 billion, and Ethereum jumped 8% to $2,367. The broader crypto market cap approached $2.6 trillion. Spot bitcoin ETF inflows have provided support at the $68,000 to $70,000 range in recent weeks.

Analysts flag the $75,000 level as the key resistance band. A sustained break above it — on strong volume — could open a run toward $80,000. Downside risks include tax-season selling ahead of the April 15 deadline and oil-driven inflation concerns that could delay Fed rate cuts.

SEC Says Crypto Wallet Interfaces Can Skip Broker-Dealer registration

The SEC's Division of Trading and Markets issued a staff statement Monday clarifying that certain software interfaces used with self-custodial crypto wallets do not need to register as broker-dealers. The guidance defines a "covered user interface" as a website, browser extension, or app that helps users initiate crypto asset securities transactions on blockchain protocols through their own wallets.

To qualify for the exemption, an interface must not custody user assets, must not provide investment advice or recommend specific transactions, must not execute trades on a user's behalf, and must charge only flat or fixed fees. Platforms that handle assets, arrange financing, or route orders fall outside the protection and remain subject to existing broker rules.

The statement is interim guidance, not a formal rule, and will be considered withdrawn five years from April 13, 2026, unless superseded by formal rulemaking. It follows a growing list of similar staff-level positions under SEC Chair Paul Atkins covering meme coins, stablecoins, and staking.

📈 Crypto investment products posted $1.1 billion in weekly inflows, the strongest week since January, driven by easing U.S. inflation data and Iran ceasefire signals. Bitcoin led with $871 million, Ethereum snapped three weeks of outflows with $196.5 million, and U.S. investors accounted for 95% of global flows.
⚖️ White House crypto adviser Patrick Witt said CLARITY Act talks are advancing beyond the stablecoin yield dispute, with multiple previously intractable issues now resolved or nearly closed. The bill still needs a Senate Banking Committee markup before a floor vote.
🏛️ Reps. Horsford and Miller re-released the bipartisan PARITY Act, a revised crypto tax bill that would apply wash sale rules to digital assets and overhaul how stablecoin transactions are taxed. Next steps remain unclear as Congress weighs a broader reconciliation package.
🏦 The American Bankers Association pushed back on a White House report that downplayed stablecoin yield's threat to bank deposits, arguing economists studied the wrong scenario. The ABA says the real risk is what happens when yield-paying stablecoins scale to $1-2 trillion.
🏦 Deutsche Boerse acquired a $200 million stake in crypto exchange Kraken via a secondary market transaction, securing a 1.5% fully diluted ownership position. The deal builds on a December 2025 partnership aimed at developing regulated crypto trading, custody, and settlement infrastructure for institutional clients.
⚖️ The DOJ opened compensation claims for OneCoin victims, making more than $40 million in forfeited assets available to those who purchased the fraudulent token between 2014 and 2019. OneCoin defrauded an estimated 3.5 million victims of more than $4 billion.
🤖 X head of product Nikita Bier hinted the platform plans to launch something to address what he called a "rough year" for crypto, without specifying details. The comments come as X Money nears a broader rollout.
🤖 Tom Duff Gordon, Coinbase's VP of international policy, left the exchange after nearly four years to become OpenAI's head of EMEA policy, part of a broader hiring push at the AI company.

🇪🇺 ClearBank Europe became the first Dutch credit institution approved as a crypto asset service provider under MiCA, and will offer institutional clients access to EURC and USDC via Circle's Mint platform without needing a separate license.
🌐 Y Combinator settled its first all-stablecoin funding round, disbursing $500,000 in USDC on Solana to prediction markets startup Totalis. YC CEO Garry Tan confirmed the option is open to any funded startup, not just crypto companies.

💰 DePIN project SHARE closed a seed round led by Greenfield Capital to build shared connectivity infrastructure targeting Africa's fragmented internet landscape.
💸 Fluent Labs closed its $BLEND ICO at $1.18 million, reaching 118% of its fundraising target.

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