HTX WLFI freeze has forced the Seychelles-based crypto exchange to suspend several WLFI-linked trading pairs. The exchange also started converting user USD1 balances into USDT. The decision followed adverse restrictions imposed by World Liberty Financial over UK sanctions compliance reviews.
According to the report, HTX said the suspension is effective as of 13:00 UTC on June 5, 2026. This involves the WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1 pairs. The exchange said the step was taken to protect users and reduce market risk.
Also Read: Galaxy Research Warns CLARITY Act Could Face Major Delays in 2026
HTX Challenges WLFI Over Frozen User Assets
The WLFI team has frozen certain on-chain addresses following compliance checks, HTX says. The restricted wallets were user-owned assets, the exchange said. It also stated that the assets were not related to HTX or any entity under sanctions.
The HTX WLFI freeze has resulted in a legal battle between the exchange and WLFI. HTX stated that the user assets were restricted without providing sufficient notice. It also stated that the decision was lacking in clear legal basis, with no transparency in procedures.
In an official statement, HTX condemned the act. The exchange stated that WLFI had failed to communicate or provide due process. It also said that the decision impacted the rights and interests of HTX users.
Liu Ye, HTX’s spokesperson and marketing head, also responded to the issue. The impacted assets were lawfully acquired by end-users, she said. She added that they were not held for any sanctioned party.
The HTX WLFI freeze also brought up concerns regarding asset ownership in blockchain networks. Liu stated that lawful-use assets should not be constrained in any project without reasons. She said user ownership remains a key principle of digital asset markets.
HTX WLFI Freeze Leads to USD1 Conversion Plan
HTX has officially requested WLFI to lift the address restrictions. The exchange also halted related trading operations until the situation was clarified. According to HTX, users can still see their WLFI balances in their accounts.
Withdrawals will restart once the on-chain limits are lifted. HTX stated that the tokens are not lost. The user, however, is not able to move the affected WLFI assets during the issuer-side restriction.
USD1 service was also impacted by the HTX WLFI freeze. HTX will change all user USD1 holdings to USDT, it said. Additional details on the conversion will be subsequently announced in a separate statement from the exchange.
HTX also stopped deposits and withdrawals on USD1. The conversion is a measure to protect users, the exchange said. HTX reported that the WLFI team issued USD1.
The exchange also discussed mentions of Huobi Global S.A., stating that it is distinct from the online platform, HTX. It also said that no sanctions designation of the entity will impact HTX’s operations or user funds.
The HTX WLFI freeze remains to be concluded until WLFI removes the restrictions. Trading and withdrawals of the affected assets are suspended. Users of HTX have been requested to wait for the official announcement for information on conversion and withdrawals.
Also Read: SpaceX and Google $920M AI deal reshapes global compute market
