The hydrothermal vent field Loki’s Castle is located in the Mohns-Knipovich bend (73°N) of the ultraslow spreading Arctic Mid-Ocean Ridge (AMOR) close to the Bear Island sediment fan. The hydrothermal field is venting up to 320° C hot black smoker fluids near the summit of an axial volcanic ridge. Even though the active chimneys have grown on a basaltic ridge, geochemical fluid data show a strong sedimentary influence into the hydrothermal circulation at Loki’s Castle. Compelling evidence for a sediment input is given by high alkalinity, high concentrations of NH4+, H2, CH4, C2+ hydrocarbons as well as low Mn and Fe contents. The low δ13C values of CO2 and CH4 and the thermogenic isotopic pattern of the C2+ hydrocarbons in the high-temperature vent fluids clearly point to thermal degradation of sedimentary organic matter and illustrate diminution of the natural carbon sequestration in sediments by hydrothermal circulation. Thus, carbon-release to the hydrosphere in Arctic regions is especially relevant in areas where the active Arctic Mid-Ocean Ridge system is in contact with the organic matter rich detrital sediment fans.