EU sanctions take effect on August 23rd; withdrawals from HTX company accounts will be prohibited

The EU will impose sanctions on August 23, 2026, prohibiting all direct and indirect transactions with HTX (HUOBI GLOBAL SA). This entity is designated in Annex XLV of the Council Regulation (EU) 2026/1848, and according to Article 5ad, all transactions with designated entities are, in principle, prohibited. This prohibition also extends to entities that act on behalf of or under the direction of HTX, as well as cryptocurrency and payment service providers that function as mirrors or successors. The scope of these sanctions is determined according to Article 13 of Regulation 833/2014. It applies to entities within EU territory, companies established under the laws of member states, nationals of member states (regardless of their location), and all entities that carry out activities, in whole or in part, within the EU. However, it is explicitly stated that the jurisdiction of Article 13 does not arise solely from connections with the EEA or Switzerland. Therefore, while nationals of the EEA and Switzerland may be eligible for specific withdrawal exemptions, EU sanctions obligations are not automatically imposed on them. After the sanctions take effect, users who wish to withdraw their account balances must apply for individual authorization from the regulatory authority of their respective member state. This authorization is granted at the discretion of the authority and may be subject to conditions, and it does not permit the continuation of transactions or trading. A key condition is the complete termination of all operational, contractual, and cooperative relationships with HTX. Funds withdrawn with authorization can only be transferred to credit and financial institutions established under the laws of EU member states, or to third-country entities owned or controlled by such institutions. Whether self-custodial wallets qualify as eligible destinations is not clearly defined in the regulations. This exemption applies only to nationals of the EU, EEA, and Switzerland, as well as individuals with temporary or permanent residency permits in those regions. This exemption does not apply to corporate clients, effectively leaving them with no legal recourse. Applications for authorization must be submitted within three months of the date the sanctions take effect, and the validity period of the authorization is also limited to a maximum of three months. HTX has already revised its terms of service as of June 18, 2026, to block access to its services for users in all EU member states. Consequently, the impact of these sanctions on a large active user base within the EU is likely to be limited. However, there is still a risk of exposure for remaining account holders, EU nationals residing abroad, and EU legal entities that are counterparties. Currently, there are no publicly available figures quantifying the size of this group. HTX previously stated in a statement regarding UK sanctions that Huobi Global S.A. is a separate entity from the online exchange. However, the EU regulations designate "HTX (HUOBI GLOBAL SA)" together, so the validity of this claim in the context of EU sanctions is uncertain.