eXch Denies North Korea Laundering, Admits Processing Stolen Bybit Funds
1min read Crypto exchange eXch has denied allegations of laundering funds stolen from Bybit in a high-profile hack that occurred on Feb. 21. The exchange, in a statement to the Bitcointalk forum, asserted that it was not involved in money laundering for North Korea's Lazarus Group and that all its funds remained safe and operations unaffected by the Bybit hack.
However, eXch admitted to processing an "insignificant portion of funds" from the hack, which eventually entered its address on the Ethereum blockchain. The exchange stated that fees from this transaction would be donated for the public good and that there were no other addresses associated with its exchange aside from deposit addresses that interacted with the isolated case.
These statements came in response to allegations on social media that eXch had laundered over $30 million from the hack. Onchain sleuth ZachXBT claimed that eXch laundered $35 million of the funds stolen by the Lazarus Group from Bybit and accidentally sent 34 Ether (ETH) with $96,000 to a hot wallet of another exchange.
Several other blockchain analysts and the security firm SlowMist have also accused eXch of receiving Ether from wallets associated with the Bybit hack. Nick Bax, a member of the white hat hacker group the Security Alliance, estimated that eXch did about $30M of volume for DPRK on the day of the hack. SlowMist also claimed there had been a significant amount of ETH converted into other cryptocurrencies on eXch.
The Feb. 21 hack on Bybit marked the largest crypto theft in history, with attackers stealing more than $1.4 billion after gaining control of Bybit's Ether multisig cold wallet. Bybit continues to process all withdrawals, but its total assets have fallen by over $5.3 billion, including the $1.4 billion in stolen assets.
In an effort to freeze stolen Bybit funds, the exchange said through a "coordinated effort," over $42 million of the stolen funds had been frozen. However, Bybit has seemingly met resistance from eXch, which accused Bybit of freezing some of its users' funds in the past and hurting its reputation. Bybit CEO Ben Zhou expressed hope that eXch would reconsider and help block funds outflowing from their exchange 
