Cryptocurrency firm HTX has been sanctioned by the UK government, who allege that the exchange was part of “infrastructure” used by Russia to circumvent sanctions and helped move $1.5 billion back to the Kremlin.
Huobi Global SA, a Panamanian company that operates HTX, was one of 18 entities sanctioned by the UK’s Foreign Commonwealth and Development Office for helping Russia to evade restrictions designed to stymie its war effort, according to a Tuesday statement.
The sanctions target the A7 network, “a Kremlin-backed system designed to bypass Western sanctions, finance military procurement, and process funds from the sale of oil to fund its war economy,” the statement on Tuesday said. “This gang is using a Kyrgyz bank suspected of facilitating payments for the network, alongside a major global cryptocurrency exchange that we suspect has channeled over $1.5 billion back into the Kremlin’s hands.”
Russia has been largely cut off from the global financial system since its full-scale invasion of Ukraine in 2022. Since then, regulators and governments have been attempting to clamp down on the illicit finance flows that have helped it sustain its war effort. The Kremlin has increasingly turned to dark networks and shadow financial systems in order to sustain its war effort, the FCDO said in the statement.
“Regulatory compliance remains our absolute top priority at HTX,” a spokesperson for HTX said in an emailed statement. “We proactively monitor and strictly adhere to regulatory frameworks in all jurisdictions where we operate globally, including the UK.”
HTX, which used to trade as Huobi, is spread out across multiple entities and it’s ownership structure isn’t clear. The UK’s Financial Conduct Authority has named Huobi Global SA as the first defendant in a legal claim it has made against the exchange, saying the entity “is to be inferred, the owner, operator and controller of the HTX Exchange.” The FCA is suing the exchange, saying that the firm illegally promoted financial products to UK consumers.
Justin Sun, a Chinese-born crypto billionaire, is an adviser to HTX. He has previously tied himself closely to the Trump family’s digital-asset ventures although that partnership has come under strain in recent months.
Lawyers representing the former holding company of HTX have said that the Panamanian company has claimed to be the operator of the exchange for years, according to documents filed at the English High Court.
A spokesperson for the FCDO didn’t comment.
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