eXch Cryptocurrency Platform to Cease Operations
In a recent announcement, cryptocurrency platform eXch revealed it will officially halt its operations on May 1. This decision follows serious allegations claiming that the exchange played a role in laundering assets connected to a significant hack targeting the cryptocurrency firm Bybit.
Management Decision and Allegations
On April 17, eXch disclosed that a consensus within its management team led to the decision to “cease and retreat” due to reports suggesting that North Korea’s Lazarus Group laundered approximately $35 million through its platform as part of a broader $1.4 billion breach of Bybit. They indicated that the exchange was facing an “active transatlantic operation” focused on shutting it down and pursuing legal actions against it.
“Although we previously managed to continue our operations despite several unsuccessful shutdown attempts—which we confirm are related to this ongoing operation—we recognize that maintaining our presence in a hostile environment, where we are subject to Signals Intelligence surveillance, is no longer viable, especially due to misunderstandings surrounding our intentions,” eXch stated.
Refuting Claims and Privacy Defense
Initially, eXch refuted claims made by blockchain investigators that it had facilitated the laundering of digital currencies for the Lazarus Group. However, they later acknowledged that they processed a minimal amount of the funds associated with the February hack. The management team defended their focus on user privacy while announcing their closure, criticizing certain exchanges for imposing questionable policies in their anti-money laundering endeavors.
The Bybit Incident
The Bybit incident, now regarded as one of the most significant hacks in the crypto sector, resulted in user withdrawals exceeding $5 billion, which included the stolen funds. Bybit’s CEO, Ben Zhou, mentioned on February 22 that the company was equipped to “cover the loss” if the stolen assets were unrecoverable. Subsequently, Bybit decided to discontinue some of its Web3 services and shut down its non-fungible token (NFT) marketplace.
Recovery Efforts
As of April 10, Bybit had successfully recaptured approximately 7% of its market share prior to the hack. The platform allocated over $2 million to bounty hunters offering information that could potentially assist in freezing significant portions of the stolen funds, estimated to make up around 89% of the total value lost during the breach, as of March 20.
