HTX rotates wallets to bypass UK sanctions, report shows
Crypto exchange HTX is bypassing traditional sanctions screening through rapid wallet rotation, highlighting a critical flaw in how financial institutions track illicit digital asset flows.
Crypto exchange HTX has adopted a rapid wallet rotation strategy to circumvent UK sanctions imposed earlier this year, creating significant compliance challenges for institutional counterparties. According to a Tuesday report by blockchain intelligence firm TRM Labs, the exchange is systematically retiring and replacing its hot wallets and funding addresses every few hours.
The UK Foreign, Commonwealth and Development Office sanctioned Huobi Global S.A., which now operates as HTX, in May 2026. The government alleged the platform was facilitating the evasion of sanctions targeting Russia. Despite the regulatory action, the exchange has continued to process transactions and remains fully operational.
TRM Labs found that HTX is executing this rotation across four major blockchains: TRON, Ethereum, BNB Smart Chain, and Solana. This strategy turns the exchange's onchain footprint into what researchers described as "a continuous moving target." For financial institutions and compliance teams, this presents a direct operational hurdle. Standard screening tools rely on static lists of known, flagged crypto addresses, rendering them largely ineffective against a platform that constantly changes its infrastructure.
The findings underscore a critical vulnerability in how the traditional financial system monitors digital asset flows. To maintain compliance, institutions must transition away from static address blocking and adopt behavior-based attribution. This tracking method analyzes the transactional patterns and operational habits of a sanctioned entity to identify new wallets the moment they are generated.
"When an entity spins up a new wallet, behavior-based attribution recognizes it and ties it back to the designated entity as it comes online, updating nearly as fast as HTX rotates," the firm stated.
HTX has previously pushed back against allegations of compliance failures. In May, a spokesperson stated that regulatory adherence remains a "top priority," adding that the exchange "proactively monitors and strictly adheres to regulatory frameworks in all jurisdictions where we operate globally, including the UK."
The wallet rotation revelations add to mounting legal pressures for the exchange in the region. In February, the UK's Financial Conduct Authority began legal proceedings against HTX for allegedly publishing unlawful financial promotions.
