Wrong-network transfers on Kraken: legal considerations and possible remedies

Cases of users losing funds by depositing tokens to Kraken on an unsupported network (e.g. sending BEP-20 tokens to an ERC-20 address) appear frequently on Reddit and other forums. Kraken’s current position is that these funds cannot be recovered, except in very limited circumstances through its new Deposit Recovery Process.

From a legal and compliance perspective, these situations raise broader industry questions:

• User responsibility: Exchanges make clear in their T&Cs that users must select the correct network. In many jurisdictions, this means the risk technically lies with the customer.

• Exchange obligations: At the same time, exchanges retain control (or custody) over assets stuck in contract addresses. Should there be a baseline duty to attempt recovery, where technically feasible?

• Transparency standards: Recovery processes differ widely between exchanges, with no common industry framework. This creates uncertainty and potential disputes.

  
  

What BitClaim can offer as a legal platform:

At BitClaim, we focus on crypto asset dispute resolution and legal-tech solutions. In this context, we see several possible contributions:

1. Case Documentation & Evidence Collection

   • Helping users record transaction details, blockchain proofs, and correspondence with exchanges.

   • Building a transparent database of similar cases to identify systemic issues.

2. Legal & Compliance Analysis

   • Assessing how such cases are treated under different jurisdictions (e.g. Singapore, US, EU).

   • Identifying whether consumer-protection or financial-services law could apply.

3. Collective Advocacy

   • Coordinating affected users to raise the issue with exchanges in a structured way.

   • Engaging regulators or industry bodies to promote clearer standards for “wrong-network” transfers.

4. Alternative Resolution Pathways

   • Exploring arbitration, mediation, or technical recovery options where possible.

   • Advising on the realistic likelihood of recovery, so users can make informed decisions.

     
     

We invite community members who have faced this issue to share their experiences (anonymously if they prefer). By aggregating cases and perspectives, we can work toward clearer industry practices and potentially fairer recovery mechanisms.

Our intention is not to single out Kraken — the problem exists across the industry. Rather, we believe that collective awareness and structured action are necessary to make exchanges more responsive, and to protect users from irretrievable mistakes.

Website: https://www.bitclaim.org/

Contact Us: enquiries@bitclaim.org