TLDR
- HTX delisted USD1 on June 7 after WLFI froze exchange-linked on-chain addresses.
- HTX is converting all user USD1 balances to USDT at a 1:1 ratio.
- WLFI said it maintains risk-based sanctions compliance controls.
- UK sanctions targeted Huobi Global S.A. over alleged $1.5B Russia-linked flows.
- HTX said the frozen USD1 assets belonged to individual users, not a sanctioned entity.
HTX has delisted the USD1 stablecoin issued by World Liberty Financial after WLFI froze multiple HTX-linked on-chain addresses as part of what it described as sanctions compliance controls.
The exchange, associated with Justin Sun, suspended support for USD1 on June 7 at 03:00 UTC and began converting all user USD1 balances into Tether’s USDT at a 1:1 ratio. HTX said the move was taken to protect users after World Liberty Financial restricted circulation of assets linked to specific exchange addresses.
The dispute has drawn attention because USD1 users on HTX were affected by an on-chain freeze connected to a broader legal and compliance fight between major crypto entities. HTX said the frozen assets belonged to individual users and were not owned by any sanctioned entity.
Justin Sun’s HTX Converts USD1 Balances to USDT
HTX halted trading for WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1 before fully delisting USD1. The exchange said all USD1 balances held by users would be automatically converted to USDT at the same nominal value.
The exchange said World Liberty Financial imposed the freeze without enough prior communication, legal basis, contractual grounds, or transparent procedures. HTX also said it may pursue legal action if the affected addresses are not unfrozen.
HTX spokesperson Molly Fu said the assets restricted by WLFI were legally purchased and owned by individual users. The exchange argued that users should not be affected by a sanctions review involving addresses tied to the platform.
World Liberty Financial has not directly confirmed whether the specific HTX-linked addresses were the target of its freeze action. The project stated that, in light of recent sanctions updates, it maintains risk-based sanctions compliance controls.
USD1 had been listed on HTX in May 2025, making the exchange one of the earliest major platforms to support the stablecoin. The delisting marks a reversal in that relationship, as HTX has now removed USD1 and shifted user balances into USDT.
UK Sanctions Form Compliance Backdrop
The freeze followed the United Kingdom’s May 26, 2026, sanctions designation of Huobi Global S.A., a Panama-registered entity tied to the HTX brand. UK authorities cited suspected facilitation of more than $1.5 billion in flows linked to Russian sanctions evasion.
HTX has said Huobi Global S.A. is separate from the online HTX exchange and that the sanctions designation should not affect HTX users or platform balances. That distinction has become central to the dispute.
From HTX’s view, WLFI acted on a sanctions designation that does not directly apply to the exchange itself. World Liberty Financial’s position has not been fully detailed beyond its statement on sanctions compliance controls.
The episode shows how stablecoin issuer controls can affect exchange users when addresses are frozen at the smart contract level. Centralized stablecoins often include blacklist or freeze functions that allow issuers to block specific addresses, even if the assets are held inside exchange wallets on behalf of users.
HTX said it could not reverse the freeze at the on-chain level. Its available response was to halt trading, delist USD1, and convert customer balances into another stablecoin.
Justin Sun and WLFI Dispute Continues
The USD1 delisting also follows a wider dispute between Justin Sun and World Liberty Financial. Sun was previously a backer of the project, but tensions developed after disagreements over further investment and access to digital assets.
The conflict escalated in 2025 when WLFI blacklisted a wallet linked to Sun after about $9 million of WLFI tokens were moved between addresses, including HTX. Sun later sued the project, claiming its contract included a freeze function that could restrict investor tokens without notice or consent.
World Liberty Financial filed a defamation lawsuit against Sun in May, accusing him of making false statements and violating token sale terms. The legal fight is now unfolding alongside the USD1 freeze and delisting.
The project lists President Donald Trump and his sons Donald Jr., Eric, and Barron as co-founders or advisers, adding public attention to its compliance decisions and stablecoin controls.
The case has also renewed debate over sanctions screening and on-chain risk labeling. Blockchain investigator ZachXBT criticized the UK sanctions approach, saying HTX address tainting had made some risk scores less useful for investigations. He also said compliance tools often fail to distinguish between activity before and after sanctions.
ZachXBT: UK Sanctions on HTX Have Made On-Chain Risk Scores ‘Meaningless’
ZachXBT argued that UK sanctions against HTX have led to excessive address tainting, making sanctions-related risk labels less useful for blockchain investigations. He said compliance systems often… pic.twitter.com/VxpQg7SILi
— Wu Blockchain (@WuBlockchain) June 8, 2026
HTX has demanded that WLFI reverse the freeze and said it is reviewing legal measures to protect user interests. Until the dispute is resolved, USD1 support on HTX remains suspended, and user balances are being moved into USDT at a 1:1 conversion rate.
