The United Kingdom has enacted sanctions targeting several cryptocurrency exchanges and individuals accused of facilitating Russia’s efforts to circumvent Western sanctions and finance its military activities in Ukraine. This marks a significant escalation in the UK’s approach to regulating the cryptocurrency sector in relation to international security.
On May 26, 2026, the U.K. Foreign, Commonwealth & Development Office announced a sanctions package that includes 18 entities and individuals associated with what officials describe as Russia’s “illicit financial infrastructure.” This infrastructure is alleged to be instrumental in moving funds, procuring goods, and sustaining military operations.
Among the entities sanctioned is Huobi Global S.A., which operates the HTX exchange, recognized as one of the largest cryptocurrency exchanges globally, with a trading volume of approximately $3.3 trillion last year. The blockchain analytics firm Elliptic has suggested that HTX may have provided services to both the A7 payments network and Garantex, a Russian exchange that had previously faced sanctions.
Garantex, which recently rebranded to Grinex, ceased operations following a significant cyber incident that resulted in a loss of $13 million, reportedly linked to state-sponsored actors. The sanctions also extend to Open Joint Stock Company “Virtual Asset Issuer,” a firm based in Kyrgyzstan known for its USDKG gold-backed stablecoin, and several individuals, including Sergey Mendeleev and Liran Cohen, who are accused of engaging in sanctions-evasion activities.
This latest sanctions package represents one of the UK’s most robust actions against the use of cryptocurrencies for illicit purposes. For the first time, the U.K. has applied Regulation 17A of its Russia sanctions regime to cryptocurrency exchanges, a regulatory tool previously reserved for banks under sanctions.
As part of these measures, U.K. financial institutions and crypto service providers are prohibited from maintaining correspondent relationships with the designated entities or processing payments associated with them. Furthermore, companies may be required to freeze assets and trace blockchain transactions linked to the sanctioned platforms.
Elliptic has indicated that compliance may necessitate tracing transactions across multiple blockchain “hops,” meaning that checks would extend beyond direct counterparties to include any wallets and exchanges involved in the transaction chain.
A significant focus of the sanctions is the Kremlin-backed A7 payments network, which British officials claim has been instrumental in processing revenues from Russian oil sales and supporting military procurement efforts. The U.K. government estimates that this network facilitated over $90 billion in transactions last year.
As the U.K. implements these sanctions, other regulatory bodies are likely to observe closely, as this approach could set a precedent for how traditional financial sanctions are applied to digital asset markets. The sanctions took effect immediately, although no response has been received from Huobi regarding the measures.
The UK has imposed sanctions on cryptocurrency exchanges and individuals linked to Russia's efforts to evade Western restrictions. This move represents a significant step in regulating the cryptocurrency sector in relation to international security.