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HTX shifted $1.3 billion from its reserves to an unnamed third party. The move came as the European Union Council and the UK Foreign, Commonwealth, & Development Office both imposed sanctions on the exchange — and it’s raising serious alarm.
The transfer first showed up in HTX’s June proof of reserves report, which was the first time the exchange publicly acknowledged moving such a massive chunk of assets to a custodian it won’t name. Users who want to verify their balances are told to contact that custodian directly. But since the custodian’s identity remains secret, independent verification is basically impossible. That’s not a minor detail. That’s the whole point of a proof of reserves report — and HTX’s version can’t deliver it.
Wallet Rotations and TRM Labs Findings
It gets murkier. A report by TRM Labs found that HTX has been rapidly rotating wallets — a pattern consistent with efforts to stay ahead of traditional blockchain screening tools. Ari Redboard from TRM described the behavior as attempts to outpace static list-based screenings. That’s a pretty specific accusation. Static list-based screening is the standard method most compliance systems use to flag sanctioned addresses. If a wallet rotates fast enough, it can slip through before the lists update. That’s the concern here.
And it’s not just a technical footnote. HTX is operating under active sanctions from two major Western jurisdictions. Rapid wallet rotation in that environment doesn’t look like routine treasury management. It looks like evasion.
The Poloniex Connection
Protos tracked substantial portions of HTX’s assets moving through addresses labeled as Poloniex. Staked ETH was part of it. Wrapped BTC was part of it too — moving from an HTX-associated address to a chain of Poloniex-labeled addresses, including ones identified as Poloniex 7, Poloniex 10, and Poloniex 9.
That’s a systematic path, not a one-off transaction.
Roughly $200 million worth of Sky Savings USDS — sUSDS — moved to a specific address before being split into multiple parts and funneled through Poloniex’s network, eventually settling in another Poloniex address. Similar patterns showed up with Spark asset positions. Some of those positions may have been redeemed, but the overall flow keeps pointing the same direction: HTX assets landing in Poloniex-connected wallets.
Both exchanges are linked to Justin Sun. The obvious question is whether Sun is mixing HTX’s reserves with Poloniex’s holdings. No one has confirmed that. HTX didn’t respond to Protos before publication. No comment. Nothing.
The transactions between the two platforms involve several hundred million dollars. That’s not small-scale treasury shuffling. At that scale, the absence of any explanation from the exchange is itself a story.
Mislabeled Assets and Reporting Errors
There’s another layer to this. HTX’s May proof of reserves report claimed holdings of STEAK-USDC. But what was actually present in those addresses was Sky Savings USDS — sUSDS — which carries equivalent value. It’s not a catastrophic discrepancy in dollar terms, but it’s a mislabeling in an official financial disclosure. That kind of error erodes confidence in the accuracy of everything else in the report.
And it’s not isolated. HTX’s previous transparency tools, which once let users trace reserve addresses with some reliability, have become harder to use since the exchange started rotating wallets and shifting assets around. The labeling in its PoR reports has gotten less accurate, not more. For an exchange already under sanctions scrutiny, that trajectory is hard to explain charitably.
Past reports did allow some tracing of HTX’s Ethereum-based DeFi positions. That window seems to be closing. The combination of wallet rotations, undisclosed custodians, and mislabeled assets has made it significantly harder to get a clean picture of where HTX’s reserves actually sit.
Crypto exchanges have faced growing pressure globally to maintain transparent, auditable proof of reserves — especially after high-profile collapses elsewhere in the industry made clear what happens when reserve claims go unverified. HTX’s current situation sits awkwardly against that backdrop. The exchange is asking users to trust a custodian it won’t name, during a sanctions period, while its wallets rotate and its PoR labels don’t match the actual assets on-chain.
Protos made multiple attempts to get clarification from HTX. No response came before publication. The identity of the third-party custodian holding $1.3 billion in user reserves is still unknown. The wrapped BTC last seen moving through Poloniex 7, Poloniex 10, and Poloniex 9 hasn’t been publicly accounted for.
Frequently Asked Questions
Who flagged HTX’s rapid wallet rotation activity?
TRM Labs flagged it, with Ari Redboard from TRM describing the behavior as efforts to outpace static list-based screening methods.
Which Poloniex addresses received HTX asset transfers?
Protos tracked HTX’s wrapped BTC moving through addresses identified as Poloniex 7, Poloniex 10, and Poloniex 9, with approximately $200 million in sUSDS also routed through Poloniex’s network.
