EU Sanctions HTX Over Alleged Russian Sanctions Circumvention

The European Union has imposed sanctions on the cryptocurrency exchange HTX, identifying it as a financial institution or crypto service provider that has frustrated restrictions related to Russia's invasion of Ukraine. This measure, part of the EU's 21st sanctions package, prohibits transactions with HTX for individuals and companies within the EU, effective August 23.

The EU document specifically named “HTX (HUOBI GLOBAL SA).” However, this action does not constitute a full designation or asset freeze. Eligible nationals and residents of the EU, European Economic Area, and Switzerland are permitted to seek authorization to withdraw funds or close accounts within three months of the ban's implementation.

An HTX spokesperson previously stated that Huobi Global S.A. was distinct from HTX, a clarification made after the UK sanctioned Huobi Global S.A. in May. The spokesperson also indicated that HTX prioritizes compliance, cooperates with regulators, and maintains an active compliance program to screen for sanctioned entities.

The UK's earlier sanctions against Huobi Global S.A. were based on suspected support for the Russian government through financial services provided to A7 Limited Liability Company, a Russia-linked payments firm. Following the British action, HTX reiterated its commitment to regulatory compliance and adherence to rules in its operating jurisdictions.

The EU's decision follows allegations from blockchain intelligence firm TRM Labs, which claimed HTX rotated hot wallets and funding addresses across multiple blockchain networks after the UK sanctions. TRM Labs suggested that these rapid rotations reduced the effectiveness of screening systems based on static sanctions lists.

HTX, however, denied TRM's characterization, stating that wallet movements were routine, security-driven platform operations common within the industry.

The 21st sanctions package, adopted on July 23, designated 218 individuals and entities and expanded transaction restrictions to include banks, crypto platforms, and oil traders. The Council added four designations linked to the A7 network and extended its transaction ban to 14 crypto-related service platforms, including EXMO, Rapira, BitPapa, Aifory Pro, WhiteBird, NoOnecrypto, and Exnode, with restrictions also taking effect on August 23.