The UK just crossed a line crypto had never seen. For the first time, it applied a legal tool reserved for sanctioned banks to crypto exchanges. The target: a Russian network that moved $90 billion in 2025, according to official estimates. This move not only affects the sanctioned entities but sets a precedent that could reshape the global regulatory landscape for digital assets.
The Signal
On May 26, 2026, the UK's Foreign, Commonwealth & Development Office sanctioned 18 entities, including Huobi (HTX), a Justin Sun-advised exchange that processed $3.3 trillion in trading volume in 2025, and a Kyrgyzstan-linked stablecoin issuer, for allegedly helping Russia evade Western sanctions. What distinguishes this package is the legal instrument: the UK activated Regulation 17A of its Russia sanctions regime, previously reserved only for banks. It requires all UK financial firms to freeze funds and sever correspondent relationships with the designated entities. Extending that rule to crypto exchanges signals that regulators now view parts of the industry as infrastructure equivalent to formal financial institutions.
“For the first time, the UK applies the same legal tool to crypto exchanges that it uses against sanctioned banks.”
The immediate impact is asset freezes and a ban on transactions with UK entities. For HTX, this means losing access to one of the world's most important financial hubs. But beyond the immediate, the signal is clear: crypto is no longer a regulatory void. Exchanges operating in gray jurisdictions or with ties to sanctioned entities are in the crosshairs. The A7 network, founded in October 2024, has ownership tied to the Russian government: a majority stake belongs to Ilan Shor, an Israeli-Moldovan oligarch convicted in 2017 for stealing $1 billion, and a minority stake to Promsvyazbank, a Russian state-owned bank sanctioned in 2022. The Kremlin's blessing was explicit: Vladimir Putin attended the virtual ribbon-cutting for a branch in Vladivostok in September 2025. A7 also expanded to Lagos and Harare, seeking jurisdictions with less regulatory pressure.
