In its latest round of sanctions against Russia, the EU has included HTX, a cryptocurrency trading platform linked to Justin Sun, in its restrictions. According to publicly available information, this measure primarily restricts related transactions and does not include asset freezes. Simultaneously, the EU has expanded its sanctions tools for the cryptocurrency industry, covering third-country cryptocurrency service providers and the equity and management arrangements of companies regulated by MiCA.

HTX included in the latest sanctions package

This measure is part of the EU's 21st round of sanctions against Russia, which targets not only crypto service providers, but also banks, energy revenue streams, oil traders, and vessels alleged to be linked to Russia's "shadow fleet."

The report states that the EU has added several cryptocurrency service providers to its list because these platforms are believed to be linked to Russian financial channels that circumvent existing restrictions. These service providers are located in Georgia, Panama, the UAE, the Marshall Islands, Kyrgyzstan, and Belarus.

Restricted transactions, but do not involve asset freezing.

Unlike comprehensive sanctions, HTX faces not an asset freeze, but rather transaction restrictions. In other words, the EU has not demanded a freeze on the platform's assets, but will include them within the scope of this round of sanctions' transaction controls.

The European Council stated that this round of measures establishes for the first time a restrictive mechanism targeting third-country crypto service providers. If the EU determines that a platform is assisting Russia in circumventing sanctions, member states can prohibit transactions with these service providers. The EU describes this tool as a deterrent measure against relevant jurisdictions.

HTX has not yet responded to the EU measures. Reuters reports that the platform, formerly known as Huobi, was founded in 2013. Justin Sun acquired a controlling stake in 2022, but the company typically refers to him as an advisor.

The UK had previously taken action against entities related to HTX.

Prior to the EU sanctions, the UK had already imposed sanctions on Huobi Global S.A. on May 26. The company, registered in Panama, is one of the entities behind HTX. The UK stated that the company had financial services dealings with A7 and Garantex, two entities that had previously been sanctioned for their ties to Russia.

The UK Foreign Office stated at the time that HTX had provided services to A7, described as a payment network backed by the Russian state-owned Promsvyazbank. The UK also alleged that HTX had business ties to the Moscow-based cryptocurrency exchange Garantex.

In response to the UK sanctions, an HTX spokesperson previously stated that the company considers compliance a top priority and that it proactively complies with local regulatory requirements in all regions where it operates globally. However, this response only addressed the UK's allegations and did not address the basis for the EU's sanctions.

MiCA-related shareholding and management are also subject to restrictions.

In addition to the measures targeting HTX, the EU has also passed another decision to expand restrictions on Belarusian entities' participation in the EU's crypto industry. From August 25th, Belarusian citizens and residents will be prohibited from owning, controlling, or managing crypto asset service providers regulated by the Crypto Asset Market Regulation Act (MiCA).

Previously, the restrictions mainly focused on wallets, accounts, and custody services. The new rules expand the scope of restrictions to all service categories defined by MiCA, including operating trading platforms, cryptocurrency exchange, executing client orders, processing transfers, token placements, investment advice, and portfolio management.

This means the EU is incorporating two types of risks into its sanctions system: one is foreign crypto platforms identified as assisting Russia in circumventing sanctions, and the other is direct shareholding and management restrictions imposed on Belarusian entities. For crypto companies operating in Europe, compliance reviews have expanded from transactional activities to ownership and management structures.