eXch Crypto Exchange Shuts Down Amidst Money Laundering Allegations

The cryptocurrency exchange, eXch, has announced its closure, effective May 1st. This decision follows allegations that the platform was involved in laundering funds stolen from Bybit in a major hacking incident.

In an official statement on April 17th, eXch cited the allegations and the subsequent investigation as the primary reasons for its closure. The exchange claimed that a majority of its management team voted to cease operations in response to these claims of involvement with North Korea’s Lazarus Group in laundering approximately $35 million of the $1.4 billion stolen from Bybit. eXch described facing an aggressive international operation aimed at shutting it down and initiating potential legal proceedings.

The statement also referenced the intense scrutiny and hostile environment they faced, emphasizing their focus on user privacy as a key motivation. They contrasted their approach with that of other exchanges, accusing some of abusing user data through stringent anti-money laundering policies.

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While initially denying any involvement, eXch later admitted to processing a small fraction of the stolen funds. The firm stated that the significant focus on user privacy ultimately contributed to its decision to shut down, rather than compromising their users’ data.

The Impact of the Bybit Hack

The Bybit hack, one of the largest in crypto history, resulted in over $5 billion in withdrawals. Bybit’s CEO, Ben Zhou, initially assured users that the exchange could cover the losses. However, the event spurred subsequent decisions, including the closure of certain services and its NFT marketplace.

By April 10th, Bybit had recovered its pre-hack market share. The exchange actively engaged bounty hunters, paying over $2 million for information helping freeze approximately 89% of the stolen funds.

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