Crypto exchanges tighten sanctions screening amid HTX-linked activity

Major cryptocurrency exchanges are tightening sanctions screening, leading to account restrictions and transaction blocks. Between August 17 and 24, 2026, Kraken experienced a “dust attack” where nearly 12,000 small deposits from a wallet associated with the sanctioned exchange HTX (formerly Huobi) triggered automated compliance protocols. These automated anti-money laundering systems temporarily locked certain customer accounts to review the funds. Kraken is currently holding approximately $4.2 million from these flagged deposits.

Simultaneously, KuCoin has expanded its compliance measures to include indirect transfers involving 17 platforms, including HTX. Under this policy, users may face held or rejected transactions even if they are not transacting directly with a sanctioned entity, as the exchange screens for connections through intermediary service providers. This follows similar actions by Binance, which stopped processing transactions involving HTX and 10 other platforms in late August.

While blockchain analytics firms have linked certain wallets to HTX, the exchange has denied initiating these transfers and is investigating potential third-party misuse of its wallets. The increasing scrutiny by major exchanges is narrowing the movement of HTX-linked funds across the global crypto market.