HTX Delists Trump-Linked USD1 Token Under UK Sanctions Pressure
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
stablecoincrypto-sanctions
Fazen Markets Editorial Desk
Collective editorial team · methodology
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HTX announced on 6 June 2026 that it will delist the USD1 stablecoin, a digital asset linked to former U.S. President Donald Trump. The decision followed a freeze of on-chain addresses connected to the exchange by World Liberty Financial, the token's issuer, citing compliance with United Kingdom financial sanctions. The action impacts users holding approximately $3.5 million worth of the token on the platform, with trading halted and withdrawals scheduled to close within 48 hours of the announcement.
Recent actions by UK authorities under the Sanctions and Anti-Money Laundering Act 2018 have increasingly targeted cryptocurrency wallets and services. In April 2025, the UK Office of Financial Sanctions Implementation required a major exchange to freeze over $15 million in assets linked to a sanctioned Russian entity. This established a precedent for direct enforcement against digital asset intermediaries based on jurisdictional connections.
The current macro backdrop features elevated geopolitical tension and coordinated G7 efforts to tighten financial surveillance on digital payments. Regulatory pressure on dollar-linked stablecoins has intensified since the passage of the U.S. Stablecoin Clarity Act in late 2025, which mandated strict issuer licensing.
The immediate catalyst was World Liberty Financial's invocation of UK law to restrict specific blockchain addresses. The issuer stated it was obligated to comply with sanctions, forcing it to suspend services to HTX-linked wallets. This triggered the exchange's delisting decision to manage its own compliance exposure and liquidity risks.
The USD1 token had a total circulating supply of $47.2 million prior to the freeze event, according to on-chain data from 5 June 2026. The $3.5 million frozen in HTX-linked addresses represents a 7.4% reduction in the token's accessible liquidity.
| Metric | Before Freeze (5 June) | After Freeze (7 June) |
|---|---|---|
| USD1 Price Peg Stability | 1.000 +/- 0.001 | 0.987 (intraday low) |
| 24h Trading Volume on HTX | $1.8M | $0 (suspended) |
Major competing stablecoins like Tether's USDT and Circle's USDC maintained their dollar pegs during the event, trading between $0.999 and $1.001. The incident caused a 22% single-day spike in the implied volatility of smaller algorithmic stablecoins, as measured by the DeFiLlama Stablecoin Volatility Index, which hit 18.5%.
The market capitalization of all politically affiliated digital assets declined by an aggregate $120 million in the 24 hours following the announcement. This sector's total valuation now stands at $1.4 billion, down from its 2025 peak of $2.1 billion.
The delisting creates immediate second-order effects. Centralized exchanges with significant UK or European user bases, like Binance and Kraken, are likely to scrutinize listings of other politically branded assets, potentially leading to further delistings. This trend could benefit the market dominance of established, regulated stablecoins USDC and USDT, whose combined market share may increase by 1-2 percentage points in the next quarter.
Crypto custody providers and institutional trading desks that hold USD1 as operational collateral face mark-to-market losses and operational disruption. Publicly traded crypto-adjacent companies like Coinbase (COIN) and MicroStrategy (MSTR) could see negative sentiment pressure if investors broaden their risk assessment of the entire stablecoin ecosystem.
A counter-argument is that the isolated nature of the freeze limits systemic risk, as USD1 represented only 0.02% of the total stablecoin market. The technical infrastructure of larger exchanges can likely absorb the operational impact without significant downtime or broader contagion.
Positioning data from derivatives markets shows a sharp increase in short interest for tokens associated with political figures, with open interest rising 40% in the MEMEcoin futures sector. Flow is moving into perceived safe-haven assets within crypto, including Bitcoin (BTC) and Ethereum (ETH), which saw net positive inflows of $85 million to exchange-traded products on the day of the news.
The next critical catalyst is the 15 July 2026 deadline for the UK Treasury's consultation response on extending sanctions liability to non-custodial wallet software providers. A stringent proposal would signal further regulatory encroachment into decentralized finance protocols.
The European Securities and Markets Authority will publish its final report on stablecoin classification under MiCA on 30 June 2026. This report will define whether assets like USD1 qualify as regulated e-money tokens or fall into a more restrictive category.
Key technical levels to watch include the $0.95 price level for USD1. A sustained break below this support would indicate a loss of fundamental backing and could trigger redemption cascades. For the broader crypto market, maintaining Bitcoin's price above its 200-day moving average near $81,500 is crucial for sustaining positive sentiment amid regulatory headlines.
The event sets a direct precedent for sanction enforcement against crypto assets tied to specific individuals. Exchanges with UK or European operations will conduct urgent compliance reviews of similar tokens, increasing delisting risks. This regulatory scrutiny focuses on issuer structure and on-chain traceability, not just branding. Assets with clear, centralized issuers and fiat reserve audits face the highest immediate risk of similar action.
The Tornado Cash action in August 2023 targeted a privacy tool's smart contract code, a novel legal approach. The USD1 freeze is more traditional, focusing on a centralized issuer's control over specific wallet addresses linked to a regulated exchange. The magnitude is smaller—$3.5 million versus over $400 million in assets affected by the Tornado Cash sanctions—but the mechanism is more easily replicated by regulators globally.
Yes, decentralized exchanges operating via permissionless smart contracts can still facilitate USD1 trading pairs, as they lack a central entity to enforce wallet freezes. However, liquidity on these venues is often shallow. The frozen addresses cannot move funds to provide liquidity or execute trades, which will severely constrain trading volume and increase price slippage for USD1 on DEXs.
Sanctions compliance has become a decisive factor for centralized crypto exchange listings, overriding commercial considerations.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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