Sanctions Compliance Crisis: Hyperliquid Blocked Wallets for Connection with HTX — Bybit Under Fire
A wave of criticism has hit the decentralized platform Hyperliquid after it applied, in the opinion of many market participants, excessively harsh measures under British sanctions against the HTX exchange. The situation escalated into a full-blown scandal: wallets that had only indirect, multi-step interaction with the sanctioned exchange were blocked. As it turned out, Bybit could be the next target of such a radical approach.
Overreach or Legal Necessity?
The trigger for Hyperliquid's actions was the UK sanctions of May 26, 2026, against Huobi Global S.A. (associated with HTX). British authorities suspect the exchange of aiding Russia in circumventing sanctions, specifically in transferring over $1.5 billion through the so-called A7 network. Under British rules, the restrictions apply to local Virtual Asset Service Providers (VASPs). However, the key point is that Hyperliquid is a Singaporean company with no direct connection to the UK jurisdiction.
Despite this, the platform began blocking any wallets that had any contact with addresses linked to HTX after the specified date, regardless of the number of intermediate transfers. In essence, Hyperliquid went beyond the law: it blocked users for any connection to one of the largest centralized exchanges without providing an opportunity for appeal. An example cited is the case of investor Duldul Capital, who was blocked simply because he lent funds to a friend whose wallet turned out to be connected to HTX.
The Logic of Absurdity and the Threat to Bybit
Critics, particularly a user under the nickname "as required," take Hyperliquid's logic to the point of absurdity: if millions of wallets are supposedly "insignificant," then it should also block everyone who deposited or withdrew funds through Bybit — the second-largest exchange in the world — after June 17. It is worth recalling that the Singaporean regulator MAS recently added Bybit Fintech Limited to its investor alert list. Thus, by the same logic, anyone who has dealt with Bybit could also be subject to blocking.
Independent Decisions and Lack of Appeal
It is important to dispel a common misconception: analytical companies like Chainalysis or TRM Labs do not provide clients with ready-made lists for blocking. They only provide factual labels, for example, "wallet interacted with HTX." Which specific addresses to block is decided by Hyperliquid itself. And herein lies the main problem: other platforms, such as OpenSea, have a review mechanism that allowed wallets to be unblocked within hours. Exchanges like Lighter, Extended, and several others did not block the same addresses at all. This proves that a transparent appeal process does not create legal risks for the platform, but merely demonstrates good faith.
Prominent on-chain researcher ZachXBT noted that the sanctions against HTX have effectively devalued risk assessment in the blockchain: compliance systems now label as "high-risk" many ordinary wallets that have only once come into contact with the exchange.
Expert Opinion: This incident is a warning sign for the entire industry. When a decentralized platform, which has no obligations to the British regulator, starts blocking users on the principle of "guilty if there is even one transaction," it undermines the very foundations of DeFi. If Hyperliquid continues in the same vein and begins hunting for wallets connected to Bybit, we will witness an unprecedented wave of blocking that will affect millions of retail investors. The market urgently needs clear rules and mechanisms for fair appeal; otherwise, trust in DeFi will be irrevocably damaged.