KuCoin now blocks or reviews crypto transactions linked to 17 sanctioned platforms, including HTX, even if users never sent funds directly, raising new compliance and user risk concerns for U.S. and global customers
KuCoin has broadened its sanctions compliance program, introducing new controls that can block or hold cryptocurrency transactions even when users have not sent funds directly to a list of 17 sanctioned platforms. The expanded policy, announced on August 27, targets indirect transfers involving platforms such as HTX (formerly Huobi Global SA), Shelbit, Aban Tether, A7 Nigeria, A7 Africa, PilotFinance, Rapira, Aifory Pro, ABCeX, WhiteBird, NoOnecrypto, Tradex, Monease, BitPapa, Exnode, Exnode Pay, and EXMO. This means that users whose funds have passed through any of these services-even via intermediary wallets or service providers-may face transaction holds, rejections, or enhanced scrutiny on KuCoin.
Indirect Transfer Risks
Under the new policy, KuCoin will screen not only the immediate source and destination of funds but also the transaction path, including intermediary addresses and service providers. The company has not specified how many transaction "hops" it will trace or what level of on-chain attribution is required to flag a transfer as indirectly linked to a sanctioned entity. Users may encounter temporary wallet or account restrictions if their transactions are flagged, and repeated or serious violations could result in suspension or loss of access to KuCoin's services. These measures reflect a growing trend among exchanges to enforce sanctions compliance beyond direct counterparties, aligning with recent U.S. and European regulatory actions.
HTX and Industry Impact
HTX is the most prominent name on KuCoin's expanded list and has already faced similar restrictions from other exchanges. Binance, for example, stopped processing transactions involving HTX and 10 other platforms as of August 23. HTX disputes the basis for these sanctions and has taken steps such as submitting documentation to courts regarding user account freezes and upgrading its wallet infrastructure to mitigate third-party risk controls. The practical effect for users is that funds associated with HTX or any other listed provider may be restricted before reaching KuCoin, depending on the transaction's path and the intermediaries involved.
Broader Exchange Compliance
KuCoin's move comes as centralized exchanges face mounting pressure to comply with international sanctions regimes, often extending enforcement to indirect exposure. This approach pushes compliance deeper into transaction provenance, requiring exchanges to assess not just where funds are coming from and going to, but also which services they have touched along the way. The trend is not isolated: other major exchanges have also tightened controls or exited markets in response to regulatory scrutiny. For example, as some exchanges wind down operations amid regulatory and market pressures, traditional financial institutions are accelerating their adoption of blockchain infrastructure, as seen in recent industry developments.
According to data from blockchain analytics providers, the number of addresses flagged for potential sanctions exposure has increased significantly since mid-2025, with several exchanges reporting a rise in transaction reviews and account restrictions. While KuCoin has not disclosed the exact number of affected users or transactions, the policy shift reflects a broader industry move toward more aggressive compliance monitoring, especially for U.S.-facing platforms.
Sanctions screening in the cryptocurrency sector relies on a combination of on-chain analytics, address labeling, and transaction tracing. While these tools can help exchanges identify potential exposure to sanctioned entities, they are not infallible. False positives, evolving address lists, and the complexity of tracing multi-hop transactions can create challenges for both exchanges and users. For U.S. users, the risk of having funds frozen or accounts restricted may increase as exchanges adopt more comprehensive compliance frameworks, even when users have not knowingly interacted with sanctioned platforms.
