The United Kingdom authorities have expanded sanctions against crypto platforms and payment services that, according to London, help Russia circumvent restrictions and conduct financial transactions related to the war in Ukraine.
One of the main figures is HTX, formerly operating under the Huobi brand. Alongside it, the list includes Rapira Group LLC, Aifory LLC, Arvix LLC, and Bitpapa IC FZC LLC.
The main feature of the new restrictions is that Britain has decided for the first time to use against crypto exchanges the same tools previously applied only to banks. Now, financial institutions, payment services, and crypto companies from the United Kingdom will have to block related transactions, freeze assets, and check transfers that may be linked to these platforms.
According to Elliptic, HTX remains one of the largest crypto exchanges in the world. Last year, the platform processed about $3.3 trillion in trading volume.
At Elliptic they also believe that HTX could have been used for transactions related to the A7 payment network and the Russian exchange Garantex, which has been under Western sanctions for several years.
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After the restrictions, Garantex changed its name to Grinex, but this did not help avoid new problems. Last month, the platform halted operations after a $13 million hack, which the company linked to state actions.
The restrictions also affected the company Open Joint Stock Company “Virtual Asset Issuer”, associated with Kyrgyzstan. It is behind the launch of the gold-backed stablecoin USDKG.
Several individuals whom British authorities consider participants in schemes to circumvent restrictions were also added to the sanctions list. Among them are Sergey Mendeleev, Igor Gorin, Irina Akopyan, and Israeli citizen Liran Cohen.
British authorities paid special attention to the A7 network. London believes that it was used to channel proceeds from Russian oil sales, and the system itself was used for purchases related to the military. According to British estimates, last year, transactions totaling more than $90 billion may have passed through A7.
For companies working with crypto, the new restrictions create a separate headache. They will have to check not only direct transfers to addresses from the sanctions list. Attention may also be paid to the entire chain of fund movements if money passed through several wallets, exchanges, or intermediary services.
In practice, this means that even an indirect connection with such platforms can become a problem. If an address appears in the transfer chain after several steps, compliance departments will still have to figure out where the funds came from and where they went next.
At Elliptic they believe that this case could become a precedent for the entire market. If the British model works, other regulators may also start applying familiar banking sanctions to crypto exchanges, wallets, and payment networks.
