The UK has imposed sanctions on Huobi and a stablecoin issuer to target Russian financial networks aiding military efforts in Ukraine.
The UK government has implemented sanctions against several cryptocurrency exchanges, including Huobi, and a stablecoin issuer, as part of efforts to prevent Russia from bypassing financial restrictions and funding its military in Ukraine.
This latest sanctions package, announced by the U.K. Foreign, Commonwealth & Development Office, targets 18 entities and individuals linked to what officials describe as Russia’s "illicit financial infrastructure for fund transfers, goods procurement, and war sustenance."
Among those sanctioned is Huobi Global S.A., which runs the HTX exchange, known for its significant trading volume of around $3.3 trillion in the previous year, according to blockchain analytics firm Elliptic.
HTX has reportedly provided services to the A7 payments network and Garantex, a Russian exchange that was previously sanctioned. After rebranding to Grinex, Garantex ceased operations last month following a $13 million hack attributed to state actors.
Additionally, the UK has targeted Open Joint Stock Company “Virtual Asset Issuer” from Kyrgyzstan, which is responsible for the USDKG gold-backed stablecoin, along with several individuals, including Sergey Mendeleev and Liran Cohen, linked to sanctions evasion.
This initiative marks a significant escalation in the UK's strategy to address the use of cryptocurrencies and alternative payment systems by Russia. Notably, it is the first application of Regulation 17A of the Russia sanctions to cryptocurrency exchanges, a regulation previously limited to sanctioned banks.
Under these new rules, U.K. financial institutions and cryptocurrency service providers must not maintain correspondent relationships with the sanctioned entities or process related payments. They may also be required to freeze assets and track blockchain transactions linked to the sanctioned platforms.
Elliptic highlighted that compliance may involve tracing transactions through multiple blockchain "hops," extending the reach of regulations to include wallets and exchanges in any transaction chain.
A key focus of the sanctions is the A7 payments network, which U.K. officials claim processed over $90 billion last year, facilitating Russian oil revenue and military procurement.
As the UK leads this regulatory effort, other global authorities are likely to observe its approach to applying traditional financial sanctions within the digital asset landscape. The sanctions are effective immediately, and Huobi has not yet responded to requests for comment.
