Why is the Russian encrypted network HTX included in the UK's sanctions list?

On May 26, 2026, the UK suddenly took action. This wasn't aimed at a specific hacker group, a fraudulent project, or a money laundering ring; rather, it directly sanctioned an entire crypto-financial network. The list included: the Russian-related crypto payment network A7, the peer-to-peer platform Bitpapa, the payment system Rapira, several Kyrgyzstani financial entities, and legal entities associated with HTX. After the news broke, many people's first reaction was: "HTX is in trouble." However, simply understanding this as "an exchange being sanctioned" greatly underestimates its significance. This is the first time the UK has used bank-level sanctions against a cryptocurrency exchange—the asset freezing and transaction tracking mechanisms previously used only by traditional financial institutions have now been officially implemented on the blockchain. Ruble, Stablecoin, Kyrgyzstan: A Funding Channel to Bypass Sanctions The existence of the A7 network is the core reason for these sanctions. Even after Russian companies were cut off from traditional dollar payment channels, money still needed to flow. The A7 network provides an alternative path: exchanging rubles for a stablecoin pegged to the ruble and issued in Kyrgyzstan—and then exchanging that for dollar-denominated stablecoins like USDT, thus completing cross-border settlements without going through the traditional banking system. Oil export revenues and military procurement funds all flow through this mechanism. Kyrgyzstan's financial system plays a "stepping stone" role, with local banks providing channels for the funds to reach their destinations. British estimates suggest that in 2025 alone, funds flowing through the A7 network could exceed $90 billion—equivalent to about half of Russia's annual military expenditure. This system has its historical context. Its core predecessor was Garantex—one of Russia's largest cryptocurrency exchanges—which was shut down by Western authorities in March 2025 and subsequently reopened under the name "Grinex," continuing to handle A7-related fund flows. In April of this year, Grinex suffered another hacker attack, which it attributed to "foreign intelligence agencies," resulting in a loss of approximately 1 billion rubles and the cessation of operations. This latest move by the UK comes after Grinex's shutdown and as the A7 network seeks restructuring—the aim is to eliminate upstream nodes before it finds a new home. The sanctions have escalated: from "blocking addresses" to "disconnecting connections." This round of sanctions is more severe than any previous Western sanctions. The conventional approach was to blacklist specific addresses or entities, allowing the sanctioned party to continue operating under a different guise—Garantex becoming Grinex is a typical example. This time, the UK is using bank-style sanctions: requiring all UK financial institutions to freeze assets related to sanctioned entities and track related transactions. According to blockchain security company Elliptic, this tracking process may require multiple transaction "jumps," extending to wallets and exchanges indirectly linked to the sanctioned entities. The scope of the attack has expanded from "blocking addresses" to "severing financial connections," making its penetration several times greater than previous methods. This is not an isolated action. In April of this year, the EU's 20th round of sanctions already included restrictions on A7-related crypto services. The UK's follow-up action signifies that Western sanctions against Russian cryptocurrencies are evolving from "targeting individual platforms" to "systematically blocking alternative financial networks." HTX Named, Users Become the Sandwich Generation HTX was named in this list. Independent data is even more alarming—TRM Labs tracked over $4.9 billion in direct on-chain transfers from HTX to sanctioned entities since 2021. In the 14 months following Garantex's closure, HTX's fund flows to its successor exchange increased tenfold. HTX subsequently issued a statement emphasizing that the sanctioned "Huobi Global S.A." and the online HTX trading platform are separate legal entities, and that the platform's operations are unaffected. Justin Sun, in his capacity as an advisor, stated he would cooperate with the UK authorities in communication. However, the market did not wait for the "misunderstanding to be cleared up." Bybit, OKX, Bitget, and UPbit issued compliance warnings almost simultaneously, advising users to avoid HTX-related addresses. Elliptic and Chainalysis added HTX-related addresses to their risk labeling system—a system that forms the infrastructure for risk control across the entire crypto industry; once a address is labeled, almost all platforms connected to this system automatically tighten their controls. Ultimately, ordinary HTX users faced restrictions on fund flows and frozen accounts. They did nothing wrong; they simply happened to be on the outermost edge of this game. The On-Chain World is Entering the Geofinancial Era. Behind these sanctions, what deserves more attention is not a particular exchange or a particular payment channel. The real change lies in the fact that, as the traditional financial system continues to decouple, cryptocurrencies are becoming increasingly deeply involved in global geofinancial games. In the past few years, Western regulation of the crypto industry has largely focused on investor protection, anti-money laundering, and market compliance. But this time, the UK has directly regarded on-chain payment networks as part of cross-border financial infrastructure and, for the first time, has used sanctions measures approaching those of the traditional banking system. This means that the role of cryptocurrencies is changing in the eyes of global regulators. It is no longer merely an "emerging asset market" outside the traditional financial system, but is beginning to be seen as an important tool capable of influencing cross-border capital flows, international trade settlements, and even geopolitical financial balances. The continued flow of Russian funds through stablecoins, OTC networks, and on-chain payment systems has further heightened the vigilance of Western regulators regarding the role of digital assets in cross-border settlements. In a sense, cryptocurrencies have begun to enter the realm previously dominated by SWIFT, the dollar clearing system, and international banking networks. This is why the focus of this round of sanctions is no longer just on individual platforms, but rather on payment networks, stablecoin circulation, cross-border address linkage, and intermediate financial nodes. Whether Russia will continue to seek new on-chain payment paths, and how Kyrgyzstan and other Central Asian countries will adjust their financial policies, remains to be seen. What is certain is that blockchain is becoming one of the new arenas for international financial competition.