EU Regulators Probe OKX Over Bybit Hack, MiCA Compliance

European regulators have launched an investigation into OKX following a significant cyberattack on Bybit, where approximately $100 million in stolen cryptocurrency was laundered through OKX’s Web3 platform. The scrutiny comes as authorities assess whether the platform falls under the Markets in Cryptoassets (MiCA) regulations and whether penalties should be imposed. This investigation is part of a broader discussion among national watchdogs about the oversight of crypto exchanges under the new EU framework.

The hackers exploited OKX’s Web3 service to move the stolen assets, primarily Ethereum (ETH), through decentralized platforms and cross-chain bridges. This incident is considered one of the most sophisticated cyberattacks on the crypto industry, highlighting the vulnerabilities within the decentralized finance (DeFi) ecosystem. The stolen funds were transferred through various decentralized platforms, making it challenging for authorities to trace the transactions.

Regulators are debating whether OKX’s Web3 platform should be classified under MiCA rules. Some authorities argue that its integration with OKX’s main platform makes it subject to regulatory oversight. Others contend that fully decentralized platforms are exempt from MiCA, complicating the decision on penalties. This debate underscores the complexities of regulating decentralized finance platforms, which often operate in a legal gray area.

At a meeting on March 6, regulators from the EU’s member states reviewed the case under the European Securities and Markets Authority (ESMA). Watchdogs from several countries stated that OKX’s Web3 platform should fall under MiCA rules due to its connection to the main exchange website. Under MiCA’s Article 64, a license can be revoked if an entity fails to prevent money laundering or violates financial rules. European regulators, including esma and the European Banking Authority (EBA), are pushing for an investigation into whether OKX remains compliant with its MiCA license.

OKX secured a MiCA pre-authorization in January through its European hub in Malta. The exchange later obtained permission to operate across the European Economic Area (EEA). However, Malta’s financial regulator is now reviewing whether to withdraw the permit due to the ByBit hack. During the EU discussions, Malta’s representatives indicated plans to meet with OKX executives to address the situation. Authorities may impose sanctions or revoke OKX’s license if found in breach of MiCA regulations.

This investigation into OKX highlights the growing scrutiny of crypto exchanges