Hyperbole of Sanctions: Hyperliquid Blocks Wallets for Connection with HTX, Bybit Could Be Next
The decentralized exchange Hyperliquid has found itself at the center of a major scandal. The platform, registered in Singapore, has begun mass-blocking user wallets that have interacted in any way with the cryptocurrency exchange HTX. And this is far from the limit — addresses linked to Bybit could also be affected.
Root of the Problem: UK Sanctions Against HTX
The trigger for Hyperliquid's actions was UK sanctions imposed on May 26, 2026, against Huobi Global S.A., a company associated with HTX. Authorities suspect the exchange of aiding Russia in circumventing restrictions — specifically, transferring over $1.5 billion through the so-called A7 network. Under UK rules, the restrictions apply to local virtual asset service providers (VASPs).
However, Hyperliquid, which is not a UK company and has no ties to the UK, has gone beyond the law. The platform has begun blocking any wallets that have indirectly come into contact with addresses that interacted with HTX after May 26, regardless of the number of intermediate transactions.
Hyperliquid's "Absurd" Logic
As experts note, Hyperliquid has chosen the strictest interpretation of the sanctions. For example, investor Duldul Capital was blocked simply because they lent funds to a friend whose wallet turned out to be linked to HTX. Moreover, the platform has no transparent mechanism for appealing decisions.
Critics suggest taking Hyperliquid's logic to its absurd conclusion: since millions of wallets are supposedly "insignificant," the platform should block everyone who deposited or withdrew funds through Bybit — the world's second-largest exchange, which Singapore's regulator MAS has placed on an investor warning list — after June 17.
Why Is This Overkill?
Analysts refute the common belief that Hyperliquid's hands are tied by analytics firms like Chainalysis or TRM Labs. In reality, these companies only provide factual labels (e.g., "wallet interacted with HTX"), while Hyperliquid itself makes the decision to block. Other platforms, such as OpenSea, have unblocked similar wallets within hours, while exchanges Lighter and Extended did not block them at all. This proves that a transparent appeals process does not create legal risks.
Prominent on-chain researcher ZachXBT notes that the sanctions against HTX have effectively devalued risk assessment in blockchain: compliance systems now flag as "high-risk" many ordinary wallets that have only once come into contact with the exchange.
Expert Opinion
Hyperliquid risks undermining trust in decentralized finance. The strict interpretation of sanctions contradicts the very idea of DeFi — to expand people's opportunities, not to deny them access without the right to defense. If the platform continues in the same vein, Bybit could be the next victim, and then a wave of blockades will engulf millions of users worldwide.