Cryptocurrency exchange eXch will cease operations on May 1 amid allegations of money laundering tied to a Bybit hack by North Korea’s Lazarus Group. The management team decided to shut down due to escalating investigations and a hostile environment. eXch admitted to processing a small portion of funds from the hack while asserting its commitment to user privacy.
Cryptocurrency exchange eXch will halt operations on May 1 due to allegations of facilitating laundering activities linked to a significant hack on Bybit. The decision to cease operations follows an April 17 announcement, where a majority of the management team voted to step back amidst claims of connections to North Korea’s Lazarus Group, which allegedly laundered approximately $35 million from a $1.4 billion hack.
eXch disclosed that it is under investigation in an active transatlantic operation aimed at dismantling the exchange and possibly prosecuting involved parties. Despite previous operations amidst threats to their infrastructure, eXch stated the hostile environment prompted their shutdown decision. They noted their operations were misinterpreted, leading to potential targeting by signals intelligence agencies.
Initially, eXch rejected accusations from crypto analysts regarding laundering for the Lazarus Group but later admitted handling a minimal amount of funds from the February incident. Management highlighted their commitment to user privacy, contrasting their practices with what they deemed as abusive policies of other exchanges combating money laundering.
The Bybit hack is noted as one of the most significant in cryptocurrency, leading to over $5 billion in withdrawals, including the diverted funds. Bybit’s CEO, Ben Zhou, stated that the exchange could cover any losses sustained. However, following the incident, Bybit decided to phase out certain Web3 services and close its NFT marketplace.
By April 10, Bybit reportedly recovered its pre-hack market share, approximately 7%. The exchange expended over $2 million to bounty hunters to gather intelligence that could aid in freezing up to 89% of the stolen funds, as per estimates from March 20.
