Crypto
HTX Dusting: Justin Sun's Attempt At Regulatory Warfare?
HTX dusting has sparked a wave of wallet freezes and conspiracy theories, but the exchange says its investigation found no involvement.
22h ago 4,280
BLOCKINSIDERLoadingHTX dusting has sparked a wave of wallet freezes and conspiracy theories, but the exchange says its investigation found no involvement.
Crypto news headlines today featured a series of unusual transactions reported by users who ended up receiving money they weren’t expecting.
Under different circumstances, such an instance may be termed a “blessing.” However, it instead triggered a wave of panic among users, the roots of which likely run much deeper.
HTX Dusting is basically users on Binance, Coinbase, and Hyperliquid receiving small amounts of USDT, averaging under $10-$15 from HTX. The general definition of “dusting” is someone sends a tiny, almost worthless amount of crypto - literally "dust," like a fraction of a cent - to your wallet address, without you asking for it or expecting it.
More often than not, such dusting is used by an attacker trying to figure out who you are. Attackers can trace that movement and start linking your wallet address to other addresses you control, and sometimes eventually to your real identity.
However, in the case of HTX, the problem is that this transfer can be flagged as suspicious and lead to rigorous scrutiny from the exchanges. Per the Anti-Money Laundering (AML) guidelines, such cases could even freeze the account, which is what is happening here.
Analyst katexbt.hl on X, formerly Twitter, highlighted why this instance is interesting, stating,
“HTX is under sanctions in the EU and the UK since May 26th - any owner of an address that received money from it in the past 3-4 months received a freeze from Coinbase until they show 'proof' that they weren't using a blacklisted financial entity.”
The theory currently floating across Crypto Twitter (CT) is that this is allegedly an attack from Justin Sun. According to this theory, this is the Tron and HTX founder’s alleged attempt at revenge toward EU and UK authorities. The exchange, since May 26, has faced accusations regarding helping Russia dodge sanctions.
Additionally, Binance announced it will cut off all transactions with HTX along with 11 other platforms, starting August 23. Reports indicate other major platforms (Coinbase, Hyperliquid) are tightening their compliance checks around HTX, too.
The current ‘dusting’ incident is therefore being perceived as retaliation from the HTX founder, as mass freezing of accounts could trigger severe backlash from users. This is further expected to exert pressure on the regulators of the two countries and exchanges to reconsider sanctions.
Unsurprisingly, HTX has denied any hand in the transfers, stating they are still investigating the incident. HTX Market Head, Molly stated on X,
“What we can confirm at present is that HTX's official channels have not initiated any related transfers or testing activities. As for the specific sources and reasons behind these transfers, we are conducting further verification and do not rule out various possibilities such as address tagging, on-chain transfer source identification, and more. We will refrain from speculation until the facts are confirmed.”
In a further update regarding this incident, Molly announced that HTX reviewed all deposit and withdrawal records this afternoon. Among the tens of thousands of orders on other platforms, there were no new freezing cases for the time being.
Justin Sun himself addressed the whole debacle in a single sentence, stating that the investigation revealed that the whole thing was made up.
BlockInsider reached out to HTX representatives for a comment on the whole incident and is awaiting a response. Further details regarding the truth of the transfers are also awaited.
No comments yet
Be the first to share your take when accounts launch.
