eXch, a cryptocurrency exchange, announced it’s closing its doors on May 1st. The reason? They’re facing serious heat from law enforcement over allegations of money laundering.
Accusations of Laundering Millions
eXch is accused of helping North Korea’s Lazarus Group launder roughly $35 million. This money was part of a massive $1.4 billion heist from Bybit, another crypto exchange, back in February – one of the biggest crypto heists ever. While initially denying involvement, eXch later admitted to handling “an insignificant portion” of the stolen funds, but refused to specify the exact amount.
eXch’s Decision to Close Shop
The eXch leadership team decided to shut down rather than continue battling what they called “an active transatlantic operation” targeting them. They claim government agencies are intercepting their communications (SIGINT) and that they don’t want to operate in such a hostile environment. They framed their closure as a stand for privacy, criticizing other exchanges for what they called “nonsensical” anti-money laundering policies. This approach, however, seems to deflect from directly addressing the money laundering accusations.
Bybit’s Recovery
The February attack on Bybit caused a major scare, with users withdrawing over $5 billion. Bybit’s CEO reassured customers they could cover the losses, and the exchange has since bounced back remarkably. By April 10th, they’d regained about 8% of their pre-hack market share. Bybit also offered a $2 million bounty for help tracking the stolen funds, a move that seems to have been successful. Authorities have reportedly frozen about 85% of the stolen $1.4 billion by tracing the transactions.
The Bigger Picture: Crypto Regulation
The eXch shutdown highlights the ongoing challenges in regulating cryptocurrency exchanges. These platforms offer users privacy and convenience, but that can make them attractive tools for moving stolen money. This creates a constant tension between those who prioritize user privacy and those fighting financial crime.