Crypto Exchange eXch to Shut Down Amid Money Laundering Allegations
Firm Announces Closure Following Serious Allegations
Cryptocurrency exchange eXch has announced it will cease all operations on May 1, 2025, following allegations that it was involved in laundering funds connected to a significant hacking incident involving the crypto exchange Bybit. The decision to shut down was made after a majority vote within the management team, which referred to their approach as a “cease and retreat” strategy.
In a statement released on April 17, the firm acknowledged the allegations that North Korea’s Lazarus Group had used the exchange to launder approximately $35 million from the larger $1.4 billion exploit that occurred at Bybit. eXch indicated that it was currently the subject of a transatlantic operation aimed at its shutdown and potential legal actions against its management.
Management Address Allegations
Despite initial denials regarding the involvement of eXch in laundering operations for the Lazarus Group, the company later admitted to having processed a “negligible portion” of the funds originating from the February hack. In their announcement regarding the cessation of operations, eXch emphasized their commitment to user privacy, contrasting their practices with those of other exchanges that they believe impose unfair policies in the name of combating money laundering.
The management team expressed frustration over being targeted in a hostile environment dominated by what they termed "SIGINT" (Signals Intelligence) operations. “Even though we have been able to operate despite some failed attempts to shut down our infrastructure," the company stated, "we don’t see any point in operating in a hostile environment where we are the target of SIGINT simply because some people misinterpret our goals.”
The Bybit Hack: Context and Impact
This incident follows one of the largest hacking events in the history of cryptocurrency, where more than $5 billion in assets was withdrawn from Bybit, including the stolen funds. In response to the exploit on February 22, CEO Ben Zhou assured users that the exchange was equipped to cover the losses if the funds were not recovered. However, Bybit later took steps to reduce its exposure by closing several of its Web3 services and discontinuing its non-fungible token (NFT) marketplace.
As recent reports indicated, Bybit has managed to recapture roughly 7% of its market share prior to the hack by early April. Furthermore, the exchange has invested over $2 million in bounty rewards for individuals who could assist in freezing portions of the stolen funds that were traceable to other platforms.
Conclusion
The closure of eXch highlights the ongoing challenges facing the cryptocurrency industry amid allegations of illicit activities and significant security breaches. As the regulatory landscape evolves, exchanges must navigate the complexities of compliance while maintaining user trust. This shutdown serves as a grim reminder of the potential ramifications associated with security and regulatory risks in the rapidly changing world of digital finance.
For more updates on the evolving cryptocurrency landscape, stay tuned to our coverage.
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