UK Sanctions HTX, Bans Firms from Doing Business with Exchange

The U.K. government announced Tuesday it had sanctioned HTX, the cryptocurrency exchange founded by Justin Sun, and ordered British institutions to stop doing business with the platform. Authorities said the exchange provided services that enabled Russia to evade international sanctions and that on-chain transactions that routed through HTX may need to be frozen.

The sanctions were part of a package targeting entities accused of supporting Russian financial networks. Officials accused HTX of making available funds, economic resources, goods or technology to parties in the Russian financial sector and pointed to links with A7, a Russian exchange that issues a ruble-pegged stablecoin called A7A5.

Yvette Cooper, Britain’s foreign secretary, warned the Kremlin should not expect to escape sanctions by hiding behind crypto networks and shadow financial systems.

Blockchain analytics firm Elliptic noted the practical effect for registered virtual asset service providers in the U.K.: they will be legally required to freeze funds connected to designated exchanges.

Under the measures, all institutions in the U.K. are banned from establishing financial relationships with HTX. The rules also allow authorities to treat any on-chain transaction that at one point passed through HTX as a prohibited transaction, a change that creates monitoring and compliance challenges for banks and crypto firms operating in the country. HTX reported more than $3 trillion in trading volume last year.

HTX and Justin Sun did not respond to requests for comment. The exchange limited services to new customers in the U.K. earlier this year after British authorities opened legal proceedings alleging the platform illegally promoted crypto asset services to U.K. customers.

Justin Sun faces separate litigation with World Liberty Financial, the Trump family’s crypto firm. World Liberty filed a suit accusing Sun of shorting its WLFI token last fall and defaming the company after his holdings were frozen. Sun has filed a countersuit alleging the firm improperly froze his investment. Sun previously resolved a long-running U.S. fraud case this year with a settlement.

Compliance specialists cautioned the designation could create ripple effects across crypto markets and financial institutions because tracing all historical on-chain flows through a major exchange can be difficult. Firms operating in the U.K. may need to review transaction histories and could be required to freeze assets with any link to HTX, even if the link dates back months or years.

British officials did not publish details of specific transactions linked to HTX in the announcement. Analysts say tracing funds through decentralized ledgers is complex when assets have passed through multiple platforms or mixing services. Elliptic’s guidance highlights the legal obligation for U.K.-registered crypto firms to act quickly when designated counterparties are connected to on-chain flows.

The U.K. said the sanctions apply to both traditional financial channels and virtual asset services and that enforcement will target attempts to hide or reroute funds using crypto infrastructure.