TRM claims HTX is rotating wallets to ‘stay ahead of screening’
Blockchain intelligence firm TRM Labs has claimed in a new analysis that Justin Sun-owned HTX has been “rotating its wallet infrastructure on a rapid cycle” following sanctions issued by the UK Foreign, Commonwealth, and Development Office (FCDO) against Huobi Global S.A.
The FCDO sanctions, which landed in May, claimed that Huobi Global S.A. was being used by the A7 Network in Russia to bypass sanctions meant to target Russia.
HTX quickly claimed that “the listed entity Huobi Global S. A. is distinct from the online HTX exchange.”
Read more: UK sanctions HTX for alleged Russian sanctions violations
However, this wasn’t the whole story, as Huobi Global S.A. owned the United States trademark for HTX, and Huobi Global S.A. had filed documents in court that claimed that it “owns and operates HTX.”
Following this, HTX took its already problematic reserves and hid them in a new category on its proof-of-reserves called “ThirdParty.”
HTX has been unwilling to disclose to Protos what custodian is behind this new arrangement, despite claiming on its proof-of-reserves page that users should “directly contact the third-party custodians” to verify the reserves.
Ari Redbord, global head of policy at TRM Labs, has described the behavior as “HTX changing its wallets every few hours to stay a step ahead of screening built on static lists.”
HTX has claimed to The Block that these practices “reflect routine, security-driven platform operations common across the industry.” Further, it adds that it “categorically rejects any characterization implying otherwise.”
TRM Labs works with Sun-related entities in other partnerships.
It’s a part of the so-called “T3 Financial Crime Unit,” a partnership between TRM Labs, Sun-founded TRON, and Tether which was formed “to combat illicit activity associated with the use of USDT on TRON blockchain.”
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