The detection of viral RNA inside cells triggers a diverse range of antiviral responses, including global translation inhibition, interferon secretion, and RNA sequestration. Mutations in the gene zinc-finger NFX1-type containing 1 (ZNFX1) cause severe pediatric immunodeficiencies, including chronic viral infection and autoinflammation. Here, we show that ZNFX1 is an RNA helicase with cryptic and unusual bifurcating E3 ubiquitin ligase activity. Nucleotide-dependent RNA binding stimulates ZNFX1 to generate complex ubiquitin chains via a two-component ubiquitin circuit wired in parallel, with ubiquitin flux occurring via two competing paths. One route produces K63-linked polyubiquitin that drives RNA entrapment within self-propagating ZNFX1 aggregates, and the other route produces K48-linked polyubiquitin that drives ZNFX1 turnover. RNA entrapment restricts RNA virus replication and is reversible by deubiquitination. Pathogenic ZNFX1 variants are defective for viral restriction, linking RNA entrapment to antiviral immunity in vivo.