Hyperliquid users caught off guard as HTX sanctions trigger bans

Some Hyperliquid users say they have been blocked from the exchange's official web interface after third-party wallet screening tools flagged their addresses as high risk, apparently over past exposure to HTX, the crypto exchange sanctioned by the UK earlier in May.

The issue became visible after an X user under the alias @0xasrequired said that two wallets had been blocked from Hyperliquid's frontend without a clear explanation.

Hyperliquid frontend warning showing a wallet flagged as high risk by a third-party screening tool. Source: X

A screenshot shared by the trader showed a red warning banner on the exchange's interface saying the address had been "flagged as high risk by a third-party screening tool."

"This frontend interface does not support connection to the Hyperliquid blockchain by high risk addresses," the warning said, adding that users can open a support ticket if they think the flag is an error.

As @0xasrequired later added, the apparent issue was past use of HTX, the crypto exchange formerly known as Huobi.

"Turns out my sin was using HTX," the trader wrote. "I didn't even know it was sanctioned."

The trader also claimed the wallets had become difficult to reuse because moving funds could "taint" new addresses, affecting airdrops and access across other platforms.

• Hyperliquid, a decentralized perpetual futures exchange and Layer 1 blockchain, hasn't publicly explained the reported bans or confirmed whether HTX exposure is the reason.

Why HTX became a problem

The UK sanctioned Huobi Global S.A., now known as HTX, on May 26 under its Russia sanctions regime.

• The British regulators said they had reasonable grounds to suspect Huobi Global S.A. was involved in supporting the Russian government by providing financial services or making funds and economic resources available to A7 LLC and Garantex Europe OU, crypto firms both of which directly tied to Russia.

The sanctions include an asset freeze, internet services sanctions and restrictions on correspondent banking and payment processing.

Under the UK's Regulation 17A rules, UK credit and financial institutions are barred from processing payments to, from or through a designated person.

• Crypto compliance firm Elliptic said in a blog post the UK's move marked the first time that kind of payment-processing ban was applied to crypto exchanges.
• Elliptic also said the rule can capture indirect exposure, meaning firms may need to check whether a sanctioned exchange appears anywhere in the payment chain.

That is the logic now worrying Hyperliquid users. Shortly after the sanctions were announced, HTX denied the UK's allegations, saying in an X post that the UK's designation came "without prior notice or any supporting evidence shared with us."

Frontend ban, not chain freeze

The reported restrictions appear to affect only Hyperliquid's official web interface, the app-level frontend maintained by Hyperliquid Corp., the company named in Hyperliquid's terms as the interface provide.

Hyperliquid can also be accessed through other routes. Phantom, the crypto wallet, supports Hyperliquid perps inside its own interface, while Hyperliquid's docs list a public API and SDKs that developers can use to build trading tools. For most traders, though, losing the main interface is still a practical ban.

• Another Hyperliquid community member @MixemaCrypto said they had previously been banned after an AML provider allegedly flagged their address by mistake, then were later unbanned after posting publicly about it.

• Other users criticized the lack of a formal appeals process, saying Discord support isn't enough for traders who use the platform daily or have long protocol history.