HTX, the crypto exchange formerly known as Huobi, is rotating its hot wallets multiple times a day across several blockchains to dodge UK sanctions screening, according to a report published this week by TRM Labs. The evasion tactics began after May, the report says, though it doesn't specify the exact year. The practice underscores how some exchanges continue to adapt their operations to slip past regulatory filters.
How the wallet rotation works
TRM Labs found that HTX moves funds between hot wallets on different blockchains several times each day. By constantly shifting assets, the exchange makes it harder for UK sanctions screening tools to flag transactions tied to sanctioned entities or jurisdictions. The rotation covers multiple chains, though the report doesn't name which ones. The goal is to keep the wallets' transaction history fragmented and harder to trace.
The UK maintains a sanctions regime that requires exchanges to screen transactions against lists of designated persons and entities. Frequent wallet rotation can break the chain of custody, making it difficult for automated screening systems to link a given transaction to a sanctioned wallet. TRM Labs said the technique is a deliberate attempt to circumvent those checks. The report doesn't name any specific sanctioned parties HTX might be trying to avoid, but the pattern is clear.
Timing and context
The evasion tactics started after May, according to TRM Labs. That means HTX has been running this operation for at least 14 months — possibly longer. The exchange hasn't publicly commented on the findings. HTX has faced regulatory scrutiny before, including in Hong Kong and other jurisdictions, but this is the first time a detailed report has linked it to active sanctions-evasion methods.
What TRM Labs says
TRM Labs is a blockchain intelligence firm that works with governments and financial institutions to track illicit crypto flows. Its report doesn't provide a full list of wallets or transaction volumes, but it says the rotation is systematic and ongoing. The firm recommends that UK regulators and exchanges update their screening tools to account for rapid wallet changes. Whether they've done so isn't clear from the report.
The UK Treasury and the Financial Conduct Authority didn't immediately respond to requests for comment. HTX hasn't issued a statement. The report leaves open the question of how long this practice can continue before regulators catch up.
