Crypto Exchange eXch Denies Bybit Hack Allegations Amid Growing Scrutiny
Crypto platform eXch has denied allegations of laundering $35 million from Bybit’s record-breaking $1.4 billion hack, as scrutiny from blockchain investigators intensifies.
The cryptocurrency industry is embroiled in controversy following reports that eXch processed funds linked to the Bybit breach. Onchain investigator ZachXBT and Nick Bax, a member of the white hat hacker group Security Alliance, have alleged that eXch facilitated transactions involving funds stolen by North Korea’s Lazarus Group. However, the company has categorically denied these allegations, dismissing them as baseless and an attempt to spread fear, uncertainty, and doubt (FUD).
Response to Allegations
In a Feb. 23 statement on the Bitcointalk forum, the company asserted, “We are not laundering money for Lazarus/DPRK.†The platform reassured users that all funds remained secure and that the Bybit hack had not impacted its operations. However, it acknowledged that a small portion of the stolen funds had passed through one of its addresses.
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“The insignificant portion of funds from the Bybit hack eventually entered our address 0xf1da173228fcf015f43f3ea15abbb51f0d8f1123, which was an isolated case and the only part processed by our exchange. Fees from this will be donated for the public good,†the company stated.
Despite this admission, blockchain security firm SlowMist and other analysts remain skeptical. SlowMist reported that a substantial amount of Ethereum (ETH) from wallets linked to the Bybit breach was funneled through eXch and later converted into other cryptocurrencies. Additionally, ZachXBT claimed that the platform mistakenly sent 34 ETH (approximately $96,000) to another exchange’s hot wallet, further fueling concerns.
The Largest Crypto Theft in History
The Feb. 21 Bybit hack marks the largest cryptocurrency theft to date, surpassing previous high-profile breaches. Hackers allegedly gained control of Bybit’s Ethereum multisig cold wallet, leading to the theft of over $1.4 billion in digital assets. According to DeFiLlama, Bybit’s total assets have since dropped by more than $5.3 billion, factoring in the stolen funds.
Also read: $1.4 Billion Bybit Hackers Now Tied to Solana Meme Coin Scams
In response, Bybit has launched a coordinated effort to recover the stolen assets, successfully freezing approximately $42 million thus far. However, the company has resisted Bybit’s request to assist in blocking further fund transfers.
Dispute Between Bybit and eXch
In an online forum, the company shared a copy of its response to an email from Bybit’s risk team requesting its cooperation in freezing illicit funds. eXch accused Bybit of previously freezing its users’ deposits without warning and failing to respond to efforts to resolve the issue.
“In light of these circumstances, we would appreciate a clear explanation as to why we should consider assisting an organization that has undermined our reputation,†eXch stated in its reply.
Bybit CEO Ben Zhou responded to eXch’s stance, urging the exchange to reconsider. “At this point, it’s not about Bybit or any entity; it’s about our general approach toward hackers as an industry,†Zhou remarked.
Also read: Bybit Billion-Dollar Blind Spot: $1.4B Hack Shocks Crypto World
Growing Regulatory Pressure
As regulatory scrutiny of digital asset exchanges increases, the industry faces mounting pressure to enforce stricter anti-money laundering (AML) protocols and enhance cybersecurity measures.
The ongoing conflict between Bybit and eXch raises concerns over the responsibility of cryptocurrency exchanges in preventing illicit financial activities. As investigations continue, the crypto community will closely monitor whether the company provides further transparency or if regulatory bodies step in to enforce stricter compliance requirements.
