Key Highlights
- HTX pulled USD1 from its platform following allegations that World Liberty Financial froze certain on-chain addresses without advance warning.
- All USD1 balances held by users underwent conversion to $USDT at a 1:1 exchange rate, with associated trading pairs discontinued.
- The platform cited concerns over lack of contractual basis, transparent communication, and proper procedural compliance for the freeze.
- British authorities sanctioned Huobi Global S.A., though HTX maintains the sanctioned entity operates separately from its current exchange platform.
- Legal proceedings continue between Justin Sun and World Liberty Financial regarding token restrictions and alleged breaches.
The cryptocurrency exchange HTX discontinued support for the USD1 stablecoin following claims that World Liberty Financial froze specific addresses without appropriate notification. According to the platform, this measure limited access to certain blockchain-based assets and impacted customer holdings. In response, [[LINK_START_0]]HTX[[LINK_END_0]] executed a conversion of all user deposits to $USDT at parity and discontinued associated market pairs.
Exchange Discontinues USD1 and Executes USDT Conversion
According to HTX’s announcement, World Liberty Financial implemented address freezes targeting specific on-chain wallets during sanctions compliance assessments. The platform indicated that the project team executed this action independently, restricting the movement of certain digital assets. This development led HTX to remove USD1 from its listings to preserve user funds and maintain operational integrity.
The delisting became effective this past Sunday, with deposit functionality for USD1 terminating at the same time. HTX additionally halted trading for WLFIUSDT, USD1/USDT, BTCUSD1, and ETHUSD1 market pairs across its system. The exchange confirmed automatic conversion of all USD1 holdings to $USDT at equal value, with additional implementation details forthcoming.
HTX contended that the freeze took place without adequate advance notification or contractual justification. The platform characterized the measure as lacking proper transparency and failing to observe established procedural protocols. HTX subsequently requested that World Liberty Financial withdraw the freeze and reinstate normal access.
The exchange platform indicated its intention to implement protective measures for customer assets and interests. It mentioned that such actions could encompass legal proceedings if circumstances warrant. The platform declined to provide specific timelines for potential next steps.
Regulatory Actions and Continuing Legal Proceedings
In late May, United Kingdom regulators imposed sanctions on HTX, previously operating as Huobi Global, citing concerns on May 26. Officials stated they possessed sufficient evidence to suspect the platform provided financial services supporting the Russian government. HTX responded by clarifying that Huobi Global S.A., the sanctioned entity, represents a distinct organization from the current HTX exchange operation.
The platform emphasized that the regulatory designation should have minimal impact on its existing exchange services. HTX explained its operations function independently from the entity currently under regulatory scrutiny. The exchange therefore disputed any connection between the sanctions and its ongoing business activities.
World Liberty Financial has yet to issue public confirmation regarding any HTX address freezes. The project did share on X that it implements comprehensive “risk-based sanctions compliance controls” following regulatory developments. The venture lists U.S. President Donald Trump and family members among its advisory team.
Justin Sun, reportedly an HTX owner and advisory board member, initiated legal action against World Liberty in April. His complaint alleged the platform restricted his token holdings and issued threats of token destruction without proper grounds. The following month, World Liberty filed a counter-suit against Sun alleging defamation, claiming he made inaccurate public statements and breached token purchase agreement provisions.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
