Blockchain intelligence firm TRM Labs said in a new analysis that HTX, the exchange associated with Justin Sun, has been rotating its wallet infrastructure on a rapid cycle after the UK Foreign, Commonwealth, and Development Office (FCDO) sanctioned Huobi Global S.A. in May.
The FCDO said at the time that Huobi Global S.A. was being used by Russia’s A7 Network to bypass sanctions aimed at Russia. HTX responded quickly by saying the sanctioned entity, Huobi Global S.A., was distinct from the online HTX exchange.
Questions over the relationship between HTX and Huobi Global S.A.
Protos said that was not the full picture. According to the report, Huobi Global S.A. held the United States trademark for HTX, and Huobi Global S.A. had also filed court documents stating that it owns and operates HTX.
After that, Protos said HTX moved what it described as already problematic reserves into a new category on its proof-of-reserves page called “ThirdParty.” The exchange did not disclose to Protos which custodian was behind the arrangement, even though the proof-of-reserves page said users should directly contact third-party custodians to verify reserves.
Ari Redbord, global head of policy at TRM Labs, described the activity as HTX changing its wallets every few hours to stay ahead of screening systems built on static lists.
HTX says the activity is part of normal security operations
HTX told The Block that the practices reflect routine, security-driven platform operations that are common across the industry. It also said it categorically rejects any characterization implying otherwise.
TRM also works with Sun-linked entities elsewhere
The report added that TRM Labs has other partnerships involving Sun-related entities. It is part of the so-called T3 Financial Crime Unit, a partnership between TRM Labs, Sun-founded TRON, and Tether. That initiative was formed to combat illicit activity associated with the use of USDT on the TRON blockchain.
The article was first published by Protos under the headline “TRM claims HTX is rotating wallets to stay ahead of screening.”