UK Sanctions Huobi in First Banking-Style Crypto Crackdown

The United Kingdom has imposed sanctions on 18 entities and individuals, including crypto exchange Huobi and a gold-backed stablecoin issuer, for helping Russia evade Western restrictions and finance its war in Ukraine. Britain applied banking-style sanctions to crypto exchanges for the first time, requiring U.K. financial firms and crypto service providers to freeze funds and trace transactions.

The sanctions package from the U.K. Foreign, Commonwealth & Development Office targets what officials described as Russia’s “illicit financial infrastructure used to move funds, procure goods, and sustain its war.” A major focus of the action is the Kremlin-backed A7 payments network. British officials say the network helped process proceeds from Russian oil sales and supported military procurement, moving more than $90 billion last year.

Among the sanctioned entities is Huobi Global S.A., operator of the HTX exchange. According to blockchain analytics firm Elliptic, HTX recorded roughly $3.3 trillion in trading volume last year. Elliptic said the platform is suspected of providing services to both the A7 payments network and Garantex, a Russian crypto exchange previously sanctioned by Western authorities. Garantex rebranded to Grinex earlier in the year and last month halted its operations after a $13 million “state-backed” hack.

Britain also sanctioned Open Joint Stock Company “Virtual Asset Issuer,” a Kyrgyzstan-linked company behind the USDKG gold-backed stablecoin. Other entities targeted include Rapira Group LLC, Aifory LLC, Arvix LLC and Bitpapa IC FZC LLC. Individuals sanctioned include Sergey Mendeleev, Igor Gorin, Irina Akopyan and Israeli national Liran Cohen.

The measures mark one of the country’s strongest moves yet against Russia’s use of cryptocurrencies and alternative payment systems. For the first time, the U.K. applied Regulation 17A of its Russia sanctions regime to crypto exchanges, a tool previously used against sanctioned banks. Under the rules, U.K. financial firms and crypto service providers cannot maintain correspondent relationships with the designated entities or process payments tied to them. Companies may also need to freeze funds and trace blockchain transactions linked to sanctioned platforms.

Elliptic said the rules could require firms to trace transactions across multiple blockchain “hops,” meaning compliance checks would extend beyond direct counterparties to wallets and exchanges appearing anywhere in a transaction chain. The firm added that other regulators are likely to watch closely as Britain tests a new model for applying traditional financial sanctions rules to digital asset markets.

The sanctions took effect immediately.