Kraken drops Monero withdrawal questionnaires, keeps XMR

Kraken has withdrawn questionnaires it sent to customers who bought Monero (XMR) and moved it off the exchange, and says the privacy coin stays listed. Co-CEO Arjun Sethi wrote on X late on Friday, Oct. 23, that clients who bought XMR with their own money had been emailed questions about their employer, source of funds and intended use of the coins, and that "no rule required it", The Defiant reported.

What happened

Screenshots shared by Monero users on Oct. 22 showed Kraken asking for "the rationale and purpose" of XMR withdrawals, including what they planned to do with the coins afterwards, with a seven-day deadline. Sethi said the requests came from treating a young client with a lot of money as a red flag, a judgement he rejected. "Those requests are withdrawn and the clients have been told nothing is required of them," he wrote, adding: "xmr stays listed. buy it here, take it home." He did not say how many people received the emails.

Our take

Sethi drew the right line. Exchanges are legally required to know where customer money comes from, and Kraken's source-of-funds policy stays in place. But once coins leave for a wallet the customer controls, asking what they will be used for treats self-custody itself as suspicious, which is exactly the opposite of what moving coins to your own wallet is meant to achieve.

The episode also shows how fragile privacy-coin access has become. Kraken's own rules already bar XMR deposits and trading in the EEA and the UK, and deposits, holding and trading in Canada and Australia. Where it is still offered, a compliance team acting on its own can make withdrawals feel risky overnight. Monero has had a busy month, with leverage in XMR futures close to the level seen before January's crash, so a quiet de-listing scare would have hit a crowded market.

Note the limits: Kraken's general policy, updated on Oct. 1, still lets it pause trading and deposits if an information request goes unanswered, though withdrawals are not affected. Customers holding XMR on any exchange should keep that in mind. For Kraken, which is also buying a bank in Lithuania, the quick reversal is as much about trust as about privacy.