Consumer complaint received 2025-05-28 00:00:00
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Other transaction problem — 
Company: Payward Ventures Inc. dba Kraken
State: OR

Complaint narrative:
Dear CFPB, I am filing a formal complaint against Payward Ventures Inc. dba Kraken due to their failure to detect and prevent fraudulent activity in my account, resulting in significant financial loss, and their subsequent claim that I am responsible for not only all of the funds lost during this process, but even the funds that Kraken covered and sent to an unknown address despite obvious fraud. I believe Kraken 's handling of the situation and their lack of proper fraud protection is unjust and has caused me significant emotional and financial harm. 

Incident Overview : On XX/XX/year> ( XXXX XXXX  XXXX, XX/XX/XXXX in the XXXX ), I was XXXX  and XXXX  in XXXX. During the incident, I was XXXX, and as a result of this coercion, the fraudsters gained unauthorized access to my accounts, including my XXXX account. The case numbers related to this incident are as follows : Metropolitan Police Case Number : XXXX XXXX Reference Number : XXXX National Fraud Reference Number ( XXXX ) : XXXX Fraudulent Transfers and Krakens Response : Kraken has claimed that I am responsible for the fraudulent activity in my account, specifically the {$5000.00} transfer, despite the fact that the fraud was evident and easily detectable. This claim is unjustified for the following reasons : Fraudulent Transfer of {$5000.00} : The fraudsters initiated a {$5000.00} transfer from my bank account to purchase XXXX ( XXXX ) on Kraken. Although my bank detected this fraud immediately and froze my account, Kraken proceeded with the transfer, even though the funds had not fully settled. The fraudsters then immediately transferred the XXXX to their own wallet. Kraken continued processing this transaction without detecting any suspicious activity, even though my bank had already stopped the transaction and flagged it as fraudulent. This led to a {$5000.00} deficit in my Kraken account, for which Kraken is now holding me responsible, despite my bank taking immediate action to prevent the fraudulent transfer. 

Failure to Prevent Fraudulent Withdrawal of {$72000.00} : On the same day as the fraudulent {$5000.00} transfer, XXXX allowed approximately {$72000.00} worth of cryptocurrency to be withdrawn from my account without any verification of my identity or fraud detection measures. The funds were transferred within XXXX hour of my mobile phone being stolen and my passkeys being compromised. Kraken allowed these transactions to take place without applying any holds or requiring identity confirmation, which is a significant failure in their fraud detection protocols.

Lack of Fraud Protection and Reasonable Verification : I have never made a transfer of this size from my Kraken account, nor had I ever sent money to the recipient involved. The fact that Kraken allowed these funds to exit without proper verification, despite the abnormal circumstances ( such as foreign access to my account and a theft of my phone ), is indicative of a lack of reasonable and common sense fraud detection and protection on Kraken 's part.

The {$72000.00} Loss : In addition to the {$5000.00} transfer that Kraken is claiming I am responsible for, I should not be held liable for the {$72000.00} worth of cryptocurrency that was fraudulently drained from my account. Kraken allowed this large sum of funds to leave my account without proper authentication, fraud detection, or any reasonable verification steps. This is a blatant failure to safeguard my assets and ensure that the transactions were legitimate. The lack of reasonable and common sense security measures in place at Kraken is a significant part of the reason my entire savings were stolen. I should not be held accountable for this loss.

Impact on My Life and Financial Loss : As a result of Krakens failure in fraud detection, my entire savings, consisting primarily of XXXX and XXXX, were stolen. I was finally able to access my account about XXXX hours later, only to find that all of my savings had been drained. The financial loss has been devastating. 

Given the circumstances, it is unreasonable for Kraken to claim that I owe them {$5000.00} when the fraud was so easily detectable. The following points should be taken into account : Foreign Access : The account was accessed from a foreign country in the middle of the night, which should have raised a red flag for Krakens fraud detection systems.

No Previous Transfers : I have never sent a large sum from my Kraken account, and Kraken should have recognized the transfer as suspicious.

Deficit Caused by Krakens Failure : Kraken allowed my account to go into a deficit, transferring my assets without verifying my identity or applying basic fraud protection measures.

Fraud Detection by My Bank : My bank was able to detect and prevent fraud, while Kraken failed to do the same, despite having control over the transfer of funds.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation