eXch Exchange to Shut Down Amid Bybit Hack and North Korea Links
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A crypto exchange, eXch, plans to stop operations on May 1 following its reported connection to the $1.4 billion Bybit hack. However, the shutdown news comes shortly after U.S. and European authorities launched an investigation into possible money laundering and terrorism-related activities.
To this end, the exchange, known for its privacy-focused approach and lack of know-your-customer (KYC) requirements, has been accused of helping process some of the stolen funds linked to the hack. eXch cited an ongoing “transatlantic operation” and a whistleblower report from the U.S. Department of Justice as reasons behind its shutdown decision.
Link to Bybit Hack and North Korea’s Lazarus Group
The trouble began in February when hackers stole over $1.4 billion in Ethereum (ETH) and staked Ethereum (stETH) from Bybit’s wallet. Soon after, crypto investigators, including Elliptic and ZachXBT, noticed a sudden rise in Ethereum volume through eXch. These groups claimed that eXch helped launder a portion of the stolen funds, even after Bybit asked the exchange to block such transactions.
However, the FBI later confirmed that North Korea’s Lazarus Group was behind the attack, calling the operation “TraderTraitor.” The stolen crypto was moved through decentralized exchanges, converted into Bitcoin, and spread across many blockchain addresses to hide the trail.
To this end, despite the accusations, eXch denied any wrongdoing. CEO Johann Roberts stated that delays in their anti-money laundering (AML) data updates caused missed alerts on the hacked funds. He also blamed past attacks on the exchange by Bybit as a reason for not cooperating. Eventually, eXch admitted to handling a small portion of the stolen Ethereum but maintained that it was unintentional.
Privacy Policies and Industry Criticism
As it stands, the exchange has defended its privacy-based model, saying it avoids traditional KYC to protect users. However, this approach made it unpopular among regulatory and compliance-focused firms like Elliptic, who reportedly rejected them as a client.
In its final statements, eXch criticized industry-wide AML policies, calling them flawed and easy to bypass. To this end, the exchange warned that current privacy restrictions limit innovation and claimed that its treatment shows deeper industry issues.
Until May 1, eXch will allow API access to its partners. After that, a new team will decide the company’s future.
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