eXch Exchange Shuts Down Amid Laundering Allegations
Cryptocurrency exchange eXch announced its immediate closure on May 1st, following allegations of involvement in laundering funds from the significant Bybit hack. The exchange confirmed the decision in an April 17th statement, citing a majority vote among management to cease operations in response to the accusations.
Allegations of Money Laundering
Reports suggest North Korea's Lazarus Group leveraged eXch to launder approximately $35 million from the $1.4 billion Bybit hack. eXch initially denied these claims but later admitted to processing a small portion of the stolen funds. The exchange described the situation as an "active transatlantic operation" aiming to shut them down and potentially pursue legal action. They stated that they were facing "SIGINT [Signals Intelligence]" targeting due to misinterpretations of their goals.
eXch's Justification for Closure
In their announcement, eXch emphasized their commitment to user privacy and criticized other exchanges' anti-money laundering policies. They argued that some exchanges impose unreasonable policies that negatively affect customers. This decision, however, underscores the growing regulatory scrutiny facing the cryptocurrency industry. The closure highlights the importance of robust security measures and compliance to protect against illicit activities.
The Bybit Hack: A Major Crypto Event
The Bybit hack remains one of the largest in crypto history, resulting in over $5 billion in withdrawals. Bybit CEO Ben Zhou initially stated the exchange could cover losses, but subsequently shut down some Web3 services and its NFT marketplace. By April 10th, Bybit had reportedly regained its pre-hack market share of approximately 7%, having paid over $2 million to bounty hunters for information leading to the freezing of approximately 89% of the stolen funds.
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