HTX-linked transfers trigger fears of wallet screening and freezes

Multiple users have reported dust attacks from wallets linked to the HTX exchange, formerly Huobi. Users are worried that even a small transaction can connect the wallet to the exchange, which has been sanctioned as a counterparty in the UK and the European Union. 

User wallets have received dust transactions linked to HTX addresses. A token contract for a new HTX asset has interacted with thousands of wallets on BNB Smart Chain, while other users report receiving USDT from an address tagged as HTX48. 

An HTX ambassador responded to the allegations, stating the exchange did not intentionally send out any assets, and it was not its usual mode of behavior. Justin Sun, the founder of TRON and the owner of HTX, has also not responded to questions on the spam attack. Currently, Sun has pivoted to AI, offering bonus tokens and usage of one of his new advanced models. 

As Cryptopolitan reported, HTX was also targeted in another wave of sanctions against third-country exchanges. Binance froze transactions from HTX, Exmo, and 14 other exchanges. 

Why are user wallets threatened by HTX?

Usually, a dust attack has the goal of making users send funds to the wrong address. This time, however, the attack has been tagged as compliance poisoning. 

In the EU and other regions, exchanges have started to vet and de-anonymize user wallets. This means wallets may be watched for interactions with the sanctioned exchange. So far, Binance has not confirmed it would screen for dust transfers, but it is at least possible to flag wallets for interacting with HTX. 

Some users commented that the attack could especially target crypto influencers and high-profile traders, challenging exchanges to freeze or review their accounts. Some KOLs and insiders are already reporting that the dust attack has resulted in their centralized accounts being frozen for review. 

Are dust attacks a risk to personal wallets?

A similar dust attack has targeted user wallets after the USA sanctioned the Tornado Cash mixer. At that point, a user spent $50,000 to contaminate addresses with dust transactions. 

Despite the automated risk filtering, the dust attack was not enough to ban all wallets and user accounts on centralized exchanges. Later, the US Office of Foreign Assets Control (OFAC) ruled that non-material passive receipt of funds was not enough to deem an account an accomplice to a banned service. 

The recent transactions are also often a bit larger than the usual dust attack, often handing over up to 12 USDT. The attack is also not using any new or counterfeit tokens. 

Practices on screening wallets may differ between exchanges. Binance has been the strictest, freezing some accounts for suspicious transactions. Other brokerages flag the received transaction and sometimes allow the user to send it back to a self-custodial wallet without freezing the funds. 

Currently, all wallets withdrawing from HTX after May 26 are considered sanctioned. Even decentralized services like Hyperliquid and some DeFi protocols are already blacklisting the wallets. Even if authorities do not require an account freeze, decentralized services could refuse users based on their recent connection to HTX. 

Critics believe the measures against HTX are an overreach, spending too many resources to track legitimate users instead of tracking real on-chain crime.

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