Cryptocurrency Regulation Concerns
In a troubling development for cryptocurrency regulation, the notorious crypto mixer known as eXch seems to continue its laundering operations even after it publicly declared a shutdown in mid-April. The service, infamous for its involvement in facilitating the laundering of stolen funds—most notably, an estimated millions linked to the Bybit exchange—has reportedly remained active, according to findings from TRM Labs, a blockchain analytics company.
Operational Continuity Despite Shutdown
Despite its announcement on April 17 regarding its closure, eXch retracted this communication shortly after, effectively erasing the statement from public view. Reports from TRM Labs indicate that less than two weeks later, eXch began operations anew on April 28.
Link to Illicit Activities
The firm’s analysts have linked eXch to a significant amount of illicit activities, including ties to criminal networks engaged with child abuse material (CSAM). They have traced over $300,000 in CSAM-related transactions directly back to eXch and anticipate that this figure may grow as investigations continue.
Transaction Obfuscation Techniques
Central to eXch’s operations is its mixed-pool model, which obfuscates transaction trails by mingling funds from multiple sources, complicating any tracing efforts. This mechanism draws concern from financial regulators; as explained by TRM Labs, the lack of transparency in such pools means that it becomes virtually impossible to ascertain the number of individuals behind certain transactions, thus muddying the waters between legitimate and illegitimate activities.
Recent Criminal Activity
The platform has been particularly scrutinized following an incident on February 21 when more than 400,000 Ethereum was stolen from Bybit’s cold wallet. Using a combination of decentralized exchanges, cross-chain bridges, and services like eXch, the Lazarus Group, a well-known cybercriminal organization, reportedly obscured the origins of these stolen assets effectively.
Increased Scrutiny from Analysts
As a result of its operations, eXch has drawn attention from various blockchain analytics firms, including Elliptic, which have identified it as a critical player in the cryptocurrency laundering landscape. The platform’s recent actions underscore the ongoing challenges regulators face in curbing illicit activities in the crypto space, even as there are concerted efforts from international agencies to dismantle such operations.
