The United Kingdom has imposed sanctions on a group of cryptocurrency exchanges, payment firms, and individuals accused of helping Russia evade Western restrictions and finance its war in Ukraine. The sanctions package, announced by the U.K. Foreign, Commonwealth & Development Office, targets 18 entities and individuals, including Huobi Global S.A., the operator of the HTX exchange. For the first time, the U.K. applied Regulation 17A of its Russia sanctions regime to crypto exchanges, a tool previously used against sanctioned banks. Under the rules, U.K. financial firms and crypto service providers cannot maintain correspondent relationships with the designated entities or process payments tied to them. Companies may also need to freeze funds and trace blockchain transactions linked to sanctioned platforms. Elliptic, a blockchain analytics firm, indicated that the rules could require firms to trace transactions across multiple blockchain 'hops,' extending compliance checks beyond direct counterparties. The sanctions package also targets the Kremlin-backed A7 payments network, which officials say moved over $90 billion last year, and several individuals accused of sanctions-evasion activity. The measures took effect immediately and mark a significant escalation in Britain's approach to regulating digital asset markets.

Key facts

• UK sanctions 18 entities including Huobi (HTX) for aiding Russia sanctions evasion.
• First application of banking-style Regulation 17A to crypto exchanges.
• Firms must freeze funds and trace transactions across multiple blockchain hops.
• Kremlin-linked A7 network processed over $90 billion last year.
• Sanctions also target individuals including Sergey Mendeleev and Liran Cohen.