German Authorities Seize €34M From Cryptocurrency Exchange eXch

German authorities have taken decisive action against the cryptocurrency exchange eXch, seizing approximately €34 million ($38.5 million) in digital assets and shutting down the platform. The operation, conducted by the Frankfurt am Main Public Prosecutor’s Office in collaboration with the Central Office for the Combat of Internet Crime (ZIT) and the Federal Criminal Police Office (BKA), targeted eXch for its alleged involvement in money laundering and other illicit activities.

The seizure, which took place on April 30, included a variety of cryptocurrencies and over eight terabytes of data. Carsten Meywirth, Head of the Cybercrime Department of the German Federal Criminal Police Office, highlighted the significance of the operation, stating that it underscores the industrial scale of cybercrimes. The authorities emphasized that eXch was advertised on criminal forums and openly stated that it did not implement anti-money laundering measures, making it an ideal platform for hiding financial transactions.

eXch, a privacy-focused exchange, was accused of operating without Know Your Customer (KYC) requirements and was accessible on both the Clearnet and Darknet. Users remained anonymous, with no identity verification or data storage, facilitating illicit activities. German authorities suspect that eXch facilitated around $1.9 billion in cryptocurrency transfers since its launch and received Bitcoin of criminal origin. The exchange was also allegedly involved in laundering a significant portion of the $1.5 billion stolen from the hacked cryptocurrency exchange Bybit in February, attributed to North Korea’s Lazarus Group.

Blockchain investigator ZachXBT revealed that eXch was used to launder funds from various high-profile hacks and exploits, including the Bybit hack, Multisig hack, FixedFloat exploit, and the $243 million Genesis Creditor theft. Despite these allegations, eXch announced its voluntary closure effective May 1, citing a hostile environment and pressure from ongoing investigations. The exchange denied any involvement in illicit activities and stated that it had no motivation to operate under such accusations.

However, just one day before eXch’s planned closure, German authorities acted swiftly, seizing the platform and securing numerous pieces of evidence. The Frankfurt Prosecutor’s Office has not released additional details on potential charges or arrests related to the operation. The seizure of eXch serves as a stark reminder of the ongoing efforts by law enforcement to combat cybercrime and money laundering in the cryptocurrency space. The operation highlights the need for robust regulatory frameworks and compliance measures to ensure the integrity of digital asset exchanges.