German Authorities Seize €34 Million in Crypto Assets from eXch Exchange

German authorities have taken decisive action by closing the eXch crypto exchange following a joint investigation led by the Frankfurt Public Prosecutor’s Office and the BKA. The operation resulted in the seizure of €34 million in digital assets and over eight terabytes of data. The platform was found to lack any anti-money laundering (AML) controls and allowed anonymous transactions, making it a hub for illicit cyber activity by enabling untraceable financial flows. Officials had been scrutinizing the platform for years due to its lack of identity verification, which complicated enforcement efforts. The importance of AML in digital asset platforms was highlighted by the authorities.

eXch crypto exchange was launched in 2014 as a swapping service with no identity checks. Users could swap cryptocurrencies on both the clearnet and darknet, making it a popular choice for criminal groups due to its strong anonymity features. The platform was designed without Know Your Customer (KYC) or transaction monitoring, which authorities allege facilitated the handling of funds tied to the Bybit crypto hack and the FixedFloat exploit. The absence of oversight made it a key channel for laundering illicit cryptocurrency, as its design concealed user addresses and transaction history. Operators offered API access for third-party liquidity providers, further complicating regulatory efforts.

The takedown of eXch is described as one of the largest digital asset seizures by the BKA. Some of the seized assets were linked to the $243 million Genesis Creditor theft, and investigators believe that part of the $1.5 billion stolen from the Bybit platform was laundered through the eXch crypto exchange. This operation underscores the growing abuse of cryptocurrency in large-scale financial crimes. Officials are extending their probe to map connections among cybercrime networks and identify those behind these significant breaches, aiming to hold all responsible actors accountable. The investigation also promises deeper insights into the attack methods used.

In a public press release, the BKA emphasized how cybercrime now operates at an industrial scale. The ZIT and BKA collaborated with Dutch authorities in a cross-border effort, acting just as eXch operators announced a voluntary shutdown. Authorities refuted claims of hostile surveillance, citing their own evidence. They seized the server infrastructure and relevant data during the coordinated raid. The BKA’s Central Office for Combating Internet Crime led forensic analysis. Officials warned that regulators must tackle such platforms to prevent unregulated financial systems from spreading, demonstrating global law enforcement’s resolve against illicit crypto operations.

Before the shutdown, eXch crypto exchange operators released a final statement defending their platform. They claimed to offer privacy-focused alternatives rather than enable crime, denying support for money laundering or terrorism. They argued that regulators unfairly targeted privacy services, while critics countered that the lack of KYC and data retention invited misuse. The platform’s design made it vulnerable to incidents like the FixedFloat exploit. Observers believe that features allowing unchecked transactions damaged eXch’s credibility. eXch also criticized AML-compliant services for failing to stop financial crimes, claiming that central screening did not improve security. They insisted that privacy services fought unfair labeling as mixers. Regulators, however, argued that platforms like this fuel underground economies, allowing stolen funds from the Bybit crypto hack to circulate unseen. Officials warned that such services expand opportunities for money laundering, emphasizing that the responsibility to combat illicit finance outweighs absolute anonymity. Law enforcement stresses that cooperation between regulators and industry is essential.

After its closure, eXch announced plans to donate 50 BTC to support privacy tech projects, naming Monero, MWEB, Dash, Tornado Cash, and Thorchain as key technologies. The fund aims to back lightweight privacy wallets and decentralized liquidity solutions. eXch plans to grant temporary API access during a management transition, encouraging partners to build their own infrastructure for liquidity. This case underscores the clash between privacy rights and regulators’ concerns over crime. Global law enforcement may target more unregulated platforms after this precedent, sparking a debate among stakeholders about the ethical and legal balances in digital finance.