eXch crypto exchange will shut down operations on May 1 following links to the $1.4 billion Bybit hack and an "active transatlantic operation," the team said Thursday.
eXch is a privacy-focused crypto exchange known for operating without typical KYC, or know-your-customer) requirementsThe closure comes amid mounting allegations that eXch was complicit in the $1.4 billion Bybit hack in February, allegedly facilitating money laundered by North Korea's Lazarus hacker ring.
The exchange cited an "active transatlantic operation" targeting its infrastructure and potentially pursuing money laundering and terrorism charges against its team, according to an April 17 announcement.
eXch CEO Johann Roberts told Decrypt said the decision to shut down was spurred by a "verified whistleblower from the DOJ" who provided "enough real data."
Ethereum Falls as Crypto Exchange Bybit Confirms $1.4 Billion Hack
Coin prices are falling Friday following confirmation that major centralized crypto exchange Bybit was hacked after $1.4 billion worth of tokens were stolen in a hack. More than $1.4 billion worth of Ethereum (ETH) and stETH were withdrawn from Bybit's hot wallet on Friday, and a large chunk of the funds were being sold via decentralized exchanges. Bybit co-founder CEO Ben Zhou confirmed the attack in a post on X (formerly Twitter), saying that a planned transfer was manipulated in some way and...
"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," eXch wrote in the announcement.
SIGINT here refers to Signals Intelligence, a method used for intelligence gathering.
eXch will continue to provide API access to partners until May 1. After that, a new management team will determine its future operations.
Blame game
In February, the FBI linked North Korea's infamous Lazarus Group to the Bybit incident.
Days after the hack, eXch CEO Johann Roberts responded to Decrypt's questions regarding allegations from Elliptic, ZachXBT, and other investigative groups blaming it for processing funds, despite Bybit's repeated requests to block the transactions.
At the time, on-chain investigators observed "an abnormal spike" in Ethereum volume through the platform immediately following the theft.
eXch initially denied those allegations. "We are not laundering money for Lazarus/DPRK," it said.
The exchange claimed this was due to outdated data from its third-party AML screening provider, which took roughly 12 hours to update info on the hacked addresses.
FBI Links North Korea to $1.4 Billion Bybit Crypto Heist
The FBI has officially attributed last week's $1.4 billion crypto theft from Bybit to North Korean hackers, labeling the operation "TraderTraitor" in a public service announcement released Wednesday. These threat actors are working fast to cash in on their plundered crypto, the FBI said, acknowledging that they have since converted some of the stolen assets to Bitcoin and other crypto. Those assets are now dispersed across “thousands of addresses on multiple blockchains,” the agency said. North...
eXch later acknowledged in an emailed statement to Decrypt that it had processed "vastly a minor part" from the batch of Ethereum (approximately 90,000), laundered through "multiple centralized and decentralized services" out of a total of 401,346 ETH stolen from Bybit.
eXch argued at the time that their refusal to cooperate with Bybit was due to its "direct attacks" on eXch's reputation in the past.
Bybit did not immediately respond to Decrypt's request for comment.
eXch also claimed that Elliptic refused them as a customer because they were a "non-KYC accountless exchange" operating to "preserve privacy" for its users.
Bybit Funds on the Move, Could be Headed for Bitcoin Mixers ‘Next’: Elliptic
North Korean hackers have started laundering stolen Bybit funds, with blockchain intelligence firm Elliptic tracking over $140 million in initial transactions designed to obscure the money trail. The stolen funds are being systematically moved through anonymous exchanges before being converted to Bitcoin, a process that makes it harder to trace and recover the assets, the firm wrote in a blog post on Saturday. “The second step of the laundering process is to ‘layer’ the stolen funds in order to...
Such a situation "reflects not only our challenges, but also broader issues within the industry, particularly the elitist policies of certain companies like Elliptic," Roberts told Decrypt at the time.
Elliptic did not immediately respond to Decrypt's inquiries on that matter.
For its curtain call, eXch criticized other exchanges' AML practices as "nonsensical policies" and argued that screening mechanisms can be "easily bypassed."
Edited by Stacy Elliott.
