HTX denies address poisoning as Kraken freezes $4.2M in funds

HTX said an internal review found no official accounts behind disputed micro-transfers that triggered compliance freezes at Kraken, where affected user funds reached $4.2 million.

"An internal check across operational wallets, deposit systems, and testing environments turned up no evidence of official involvement," HTX market representative Molly said on X on Aug. 20, marking the exchange's third public update since community members flagged the transfers on Aug. 18.

Community investigator 0xMoon traced 166 small USDT outflows from HTX hot wallet #48, with all 15 receiving addresses for 7.5 USDT transfers belonging to Kraken deposit addresses — none matching Coinbase as initially claimed by user 0xZiye. The UK sanctioned Huobi Global S.A. on May 26 under the Russia (Sanctions) (EU Exit) Regulations 2019, and the EU added HTX to its restrictive measures list on July 23, effective Aug. 23.

The episode tests whether automated compliance systems can separate genuine sanctions exposure from tagging noise, as Binance prepares to halt HTX transactions on Aug. 23 and affected users await resolution of frozen balances.

Molly suggested some users may have acted independently, sending small amounts from HTX-linked wallets to pressure exchanges into releasing assets frozen after Kraken applied UK sanctions-related risk controls. The largest known case involved approximately $4.2 million in frozen funds, she said. HTX said it does not endorse such actions.

Kraken has not publicly confirmed the $4.2 million figure or stated how many accounts remain under review. In one documented case on Trustpilot, a user said a withdrawal of 24,509.24 USDT from HTX to Kraken on July 20 was frozen without explanation, with Kraken refusing to return funds to the original sender address.

Justin Sun, TRON founder and HTX adviser, called the earlier viral report "fabricated" and said the Binance restriction applies only to UK and EU users. HTX has not disputed 0xMoon's on-chain review, which showed the receiving addresses displayed normal deposit and withdrawal activity afterward, indicating they had not been risk-controlled.

Sanctions Timeline Tightens

The UK's Foreign, Commonwealth and Development Office designated Huobi Global S.A. on May 26, listing variations including HTX, HTX Exchange, and Huobi Global Limited. The EU followed on July 23 with Council Regulation (EU) 2026/1848, adding "HTX (HUOBI GLOBAL SA)" to Annex XLV. Binance announced Aug. 14 it would cease processing HTX transactions starting Aug. 23.

What Comes Next

HTX said it will continue verification work and share confirmed findings without setting a public deadline. The full EU transaction ban takes effect Aug. 23, after which European regulated entities face stricter prohibitions on dealings with the listed entity. For affected users, the picture remains unresolved: Kraken has not addressed the $4.2 million figure publicly, and compliance teams across the industry are weighing how to distinguish genuine sanctions exposure from tagging noise.

The episode has revived debate about whether ordinary users should bear the burden when automated risk systems flag wallets over passive receipt of small stablecoin amounts.

This article is for informational purposes only and does not constitute investment advice.