UK sanctions Huobi and ruble stablecoin issuer in crackdown on Russia crypto networks

The United Kingdom has imposed sanctions on a group of cryptocurrency exchanges, payment firms and individuals accused of helping Russia evade Western restrictions and finance its war in Ukraine, including crypto exchange Huobi.

The sanctions package from the U.K. Foreign, Commonwealth & Development Office targets 18 entities and individuals linked to what officials described as Russia’s “illicit financial infrastructure used to move funds, procure goods, and sustain its war.”

Among them are Huobi Global S.A., operator of the HTX exchange, Rapira Group LLC, Aifory LLC, Arvix LLC and Bitpapa IC FZC LLC.

HTX is one of the world’s largest crypto exchanges, with roughly $3.3 trillion in trading volume last year, according to a blog post from blockchain analytics firm Elliptic.

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, along with several people accused of sanctions-evasion activity, including 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.