Hyperliquid is taking its blocking measures too far: from HTX to Bybit — one step away from chaos
The crypto community was shaken by a wave of outrage directed at the derivatives platform Hyperliquid. The reason was an overly aggressive policy of blocking wallets associated with the HTX exchange, which had come under British sanctions. The situation took such an absurd turn that users of Bybit, the second-largest centralized exchange in the world, are now also under threat. We examine where the line between law and arbitrariness lies.
Sanctions as a pretext: what Hyperliquid actually did
On May 26, 2026, the United Kingdom imposed sanctions against Huobi Global S.A., linked to HTX, on suspicion of aiding Russia in circumventing restrictions—specifically regarding the transfer of over $1.5 billion through the so-called A7 network. Under British rules, the restrictions apply to local virtual asset service providers (VASPs).
However, Hyperliquid, being registered in Singapore, is not a British company and is not directly obligated to comply with these sanctions. Nevertheless, the platform went beyond the law: it began blocking any wallets that had any contact with addresses that interacted with HTX after the specified date, regardless of the number of intermediate transactions. This decision does not include an appeal mechanism, which has drawn fair criticism.
Absurdity reaches extremes: Bybit is next
In his analysis, an independent researcher under the pseudonym "as required" cited a glaring example: investor Duldul Capital was blocked simply for lending funds to a friend whose wallet turned out to be linked to HTX. The author sarcastically suggests taking Hyperliquid's logic to its extreme: since millions of wallets are "insignificant," it would be worth blocking everyone who deposited or withdrew funds through Bybit after June 17—an exchange that the Singaporean regulator MAS has placed on its investor warning list.
Notably, other platforms such as OpenSea, Lighter, and Extended either quickly unblocked the same wallets within a few hours or did not block them at all. This proves that a transparent appeal process does not create legal risks for a platform, whereas its absence is a direct path to abuse.
My expert opinion
Hyperliquid risks undermining trust in itself as a decentralized platform. The strict interpretation of sanctions and the lack of the right to defense contradict the very idea of cryptocurrencies—financial freedom and transparency. If the platform continues in the same vein, the next step could be blocking users who have ever interacted with any "undesirable" address. This is not compliance; it is censorship, which will drive even the most loyal traders away from Hyperliquid.