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Key Takeaways
- World Liberty Financial froze WLFI tokens in HTX-linked addresses citing a UK sanctions compliance review connected to the May 2026 designation of Huobi Global S.A. for alleged Russia-linked sanctions evasion.
- HTX suspended WLFI and USD1 trading, halted USD1 deposits and withdrawals, and automatically converted all user USD1 balances to USDT at a 1:1 ratio.
- HTX says the frozen assets belong to individual users, not a sanctioned entity, and states it has received no explanation on the legal basis or resolution process for the freeze.
HTX has suspended trading of WLFI and USD1 assets and converted all user USD1 holdings to USDT at a 1:1 ratio after the World Liberty Financial project team froze tokens held in HTX-linked addresses, citing a UK sanctions compliance review. The exchange said it received no explanation regarding the legal basis or scope of the freeze.
WLFI Restricted HTX-Linked Addresses During UK Sanctions Review
The World Liberty Financial project team restricted on-chain circulation of WLFI tokens in HTX-related addresses, pointing to an ongoing UK sanctions compliance review as the basis for the action.
The freeze traces to a UK sanctions designation of Huobi Global S.A., the Panama-registered entity tied to HTX, on May 26, 2026, under the Russia (Sanctions) (EU Exit) Regulations 2019. The UK cited suspected facilitation of more than $1.5 billion in flows linked to Russian sanctions evasion.
WLFI maintains risk-based sanctions compliance controls and has publicly reminded users of potential restrictions on associated addresses. Its token smart contract includes an admin-controlled blacklist and freeze function, a capability the project previously exercised in 2025 disputes with large token holders.
HTX Converted All USD1 Holdings to USDT and Halted Deposits
In response, HTX suspended trading pairs for both WLFI and USD1, halted USD1 deposits and withdrawals, and automatically converted all user USD1 balances to USDT at a strict 1:1 ratio. WLFI tokens, the exchange said, remain intact on-chain, with withdrawals expected to resume once the freeze is lifted. HTX has formally requested that WLFI restore access to the affected addresses.
The exchange stated that the frozen tokens belong to individual users who legally purchased them and are not assets of any sanctioned entity or of HTX itself. An HTX spokesperson said:
“These are assets legally purchased and owned by individual users. To date, we have received no clear explanation regarding the legal basis, scope, standards, or resolution process behind this action.”
The HTX spokesperson added, “Today, WLFI holders are affected. Tomorrow, it could be anyone. User assets are not negotiable.”
HTX Was an Early Backer and the First Major Exchange to List USD1
HTX was among the earliest institutional supporters of World Liberty Financial and was the first major exchange to list USD1 on May 6, 2025. USD1 is a USD-pegged stablecoin with collateral held in custody by BitGo Trust.
HTX has stated it will keep the affected trading services suspended until the freeze on HTX-linked addresses is lifted, and has committed to providing users with updates as the situation develops. The exchange has not disclosed a timeline for resolution. As of publication, World Liberty Financial had not issued a public response addressing the specific freeze action or the details of its ongoing compliance review process.
