eXch Shuts Down After $35M Money Laundering Allegations

Cryptocurrency exchange eXch has announced that it will cease operations on May 1, following allegations of money laundering. The platform was reportedly used to launder a portion of the stolen funds from the Bybit exchange, which suffered a significant hacking incident. According to eXch's announcement on April 17, the decision to shut down was made after most members of its management team voted to "cease operations and exit" in response to the allegations. The North Korean hacker group Lazarus Group is accused of laundering approximately $35 million through the platform, which originated from the $1.4 billion hacking attack on Bybit.

The exchange stated that it has been the target of a "transatlantic joint law enforcement action" aimed at shutting down its business and potentially filing criminal charges. Despite efforts to maintain operations, eXch acknowledged that continuing to operate in a hostile environment, where it is under surveillance, would be futile. The exchange initially denied allegations that it assisted the Lazarus Group in laundering money but later admitted to handling a small portion of the funds from the February hacking incident.

The shutdown of eXch highlights the increasing scrutiny and regulatory pressure faced by cryptocurrency exchanges. The allegations against eXch underscore the challenges exchanges face in maintaining compliance with anti-money laundering regulations and the potential consequences of non-compliance. The decision to shut down also raises questions about the future of other exchanges that may be operating in similar environments. As the cryptocurrency industry continues to evolve, exchanges will need to prioritize regulatory compliance and transparency to avoid similar fates.