Crypto exchange HTX will delist World Liberty Financial's USD1 stablecoin and convert eligible user holdings into Tether's USDT at a 1:1 ratio after a dispute over frozen onchain addresses linked to the exchange. The delisting is scheduled to take effect at 3:00 UTC on June 7, with trading for WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1 pairs suspended as of 13:00 UTC on June 5. HTX said the project team unilaterally froze specific HTX onchain addresses after sanctions compliance reviews without sufficient prior communication, adequate contractual or legal grounds, transparent disclosure, or due process, directly harming users' rights to their assets. The freeze followed the UK's May 26 sanctions designation of Huobi Global S.A., which UK officials alleged facilitated more than $1.5 billion in flows supporting Russian sanctions evasion through the A7 network and the Russia-linked Garantex exchange. The dispute highlights structural risks when stablecoin issuers apply freeze powers to wallets holding customer assets on exchanges, raising questions about custody controls and governance transparency.
HTX Claims Frozen Assets Belong to Individual Users
HTX said the affected holdings belonged to individual users rather than sanctioned entities. The exchange called on World Liberty Financial to immediately unfreeze the affected assets, framing the issue as a user-protection matter rather than a standard compliance dispute. HTX spokesperson Molly Fu said the assets "are not assets belonging to any sanctioned entity" but instead "assets legally purchased and owned by individual users." Eligible USD1 balances will be converted into USDT at parity. HTX maintains that Huobi Global S.A. is a separate entity from the online HTX platform and that the UK designation does not affect its operations or user funds.
UK Sanctions Designation Preceded Address Freeze
The UK sanctioned Huobi Global S.A. on May 26, alleging the entity facilitated more than $1.5 billion in flows supporting Russian sanctions evasion through the A7 network and the Russia-linked Garantex exchange. World Liberty Financial's sanctions review appears to have treated certain HTX-linked onchain addresses as requiring restriction. HTX argues the affected assets were owned by ordinary users and should not have been frozen without clearer legal or contractual grounds. On June 3, World Liberty Financial posted a general reminder that it maintains sanctions compliance controls and that transactions involving sanctioned entities may be blocked, without naming a specific counterparty.
World Liberty Financial Previously Froze Wallet Linked to Justin Sun
World Liberty Financial previously blacklisted a wallet linked to Tron founder Justin Sun in September 2025 after he moved roughly $9 million of WLFI between addresses, including HTX, where he serves on the exchange's Global Advisory Board. Sun has since sued the project, alleging that the WLFI contract includes a hidden backdoor that allows the team to freeze investor tokens without notice or consent. World Liberty Financial has not publicly addressed the HTX freeze.
FAQ
What action did HTX take regarding USD1?
HTX suspended trading for WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1 pairs as of 13:00 UTC on June 5 and scheduled delisting of USD1 effective at 3:00 UTC on June 7. Eligible user holdings will be converted into USDT at a 1:1 ratio.
Why did World Liberty Financial freeze HTX onchain addresses?
World Liberty Financial froze specific HTX onchain addresses after sanctions compliance reviews. The freeze followed the UK's May 26 sanctions designation of Huobi Global S.A., which UK officials alleged facilitated more than $1.5 billion in flows supporting Russian sanctions evasion through the A7 network and the Russia-linked Garantex exchange. HTX maintains that Huobi Global S.A. is a separate entity from the online HTX platform.
