Payward, Kraken’s parent company, has openly acknowledged its backing for the Operation Atlantic initiative, which aims to combat the crypto approval scam. Yet within minutes, prominent blockchain analyst ZachXBT has cast doubt on Kraken’s reputation, pointing out Kraken’s addition of Memecore ($M) on its spot trading list in July 2025. “In recent posts, the only achievement the team has shared is $66M total volume on a launchpad and thousands of ‘users’ from its incentivized InfoFi campaigns,” ZachXBT notes. He has been especially vocal in getting rid of InfoFi projects from X. Kraken lays out support for Operation Atlantic According to Kraken, Operation Atlantic, jointly headed by the UK’s National Crime Agency (NCA), the United States Secret Service, Ontario Provincial Police, and the Ontario Securities Commission, was conducted in March 2026 and targeted “approval phishing” fraud schemes. These involve deceiving victims into signing off on harmful smart contracts that drain funds from their wallets. Operation Atlantic uncovered over $45 million in criminal assets, seized over $12 million in assets, and identified more than 20,000 potential victims in the UK, USA, and Canada. Payward’s efforts were not limited to being a data source. The firm arranged for team members to travel to NCA’s head office in London to work alongside investigators. They also made arrangements to notify their clients who used Kraken who might be affected and responded quickly to any data requests from law enforcement agencies. This helped establish the firm as a collaborative partner in the industry and ensured that disruptions happened in real time. This campaign has affected more than 120 fraud-related sites and also provided new data regarding investigations underway. Cooperation between the government and private enterprises, such as Chainalysis and Tether, helped track funds to prevent laundering. ZachXBT questions Kraken’s due diligence on memecore ($M) A short while after Kraken bragged about its efforts against scams, ZachXBT shared a lengthy thread claiming that Kraken listed $M (Memecore) on July 3, 2025. This is despite multiple red flags. The most notable of these were $7.9 million in questionable transactions from Kraken to 18 newly created addresses soon after listing. These accounts owned 11.7 million $M coins valued at approximately $39.8 million. ZachXBT referenced an address believed to belong to a Memecore team member (0x6f1f0a1ccc76d2d292249b19c19e401f0e843ba9), who received 200 million $M in TGE and quickly transferred 5.3 million $M to two Kraken deposit addresses. ZachXBT identified 18 distinct Kraken withdrawal addresses that were receiving substantial amounts of $M. TRM Labs’ on-chain visualization showed multiple large transactions flowing from Kraken hot wallets to groups of withdrawal addresses. Additional information from other posts provided some staggering statistics. According to on-chain research, insiders and related wallets held about 99.6% of the circulating supply, leaving just 0.0115% of the total supply open for non-insiders to purchase (around $4 million at maximum valuations). Kraken’s $M situation as reported by ZachXBT. Chart compiled by Cryptopolitan. The token’s market cap reached $6 billion (with fully diluted valuations sometimes exceeding $18 billion). On-chain illiquidity, however, was significant. At this point, Kraken is one of the few platforms still supporting spot trading for $M. The wider impact of Operation Atlantic on the crypto fraud landscape The juxtaposition has led to a lot of discussion within the crypto community. Operation Atlantic marks a move towards a more proactive approach to dealing with crypto-related fraud, rather than relying solely on after-the-fact investigation. Apart from the numbers related to financial losses, new information on fraud networks has been obtained, as well as proof that blockchain analysis tools used by partners can be used to freeze assets before laundering takes place at exchanges and mixers. As reported by Cryptopolitan, Binance also joined forces with law enforcement agencies in support of Operation Atlantic. However, the exchange did not freeze any accounts on its CEX. Multiple reports indicate that Coinbase teamed up with government agencies as part of the private-sector collaboration in Operation Atlantic. If you want a calmer entry point into DeFi crypto without the usual hype, start with this free video.
