OKX Denies EU Probe, Aids Bybit After $1.5B Hack

Cryptocurrency exchange OKX has strongly refuted claims that it is under investigation by European regulators for its alleged involvement in laundering stolen funds. The exchange has stated that it is not currently facing any regulatory probes, contradicting reports that suggest EU authorities are examining OKX's Web3 service for potential violations of the Markets in Crypto Assets Regulation (MiCA).

According to the reports, regulators are assessing whether OKX's Web3 platform falls under the MiCA framework, which was adopted in June. If found in violation, OKX could face severe penalties, including the revocation of its MiCA authorization. However, OKX has clarified that its Web3 service is a self-custody wallet service that acts as an aggregator to enhance user efficiency, similar to services offered by other industry participants.

In response to the allegations, OKX detailed the steps it took following the Bybit hack. The exchange immediately froze associated funds that entered its centralized exchange and developed a feature to block addresses linked to the attack from using its decentralized services. OKX has also been assisting Bybit in tracking and mitigating the movement of stolen assets. Star Xu, OKX CEO, criticized Bybit’s handling of the situation, attributing the security breach to Bybit’s own vulnerabilities rather than any shortcomings on OKX’s part. He stated that Bybit built their own Web3 wallet and DEX base using OKX's Wallet/DEX API.

The Bybit hack occurred while the exchange was moving nearly $1.5 billion worth of Ethereum (ETH) to a cold wallet using Safe’s multi-signature service. A compromised laptop of a Safe developer allowed hackers to inject malware into the wallet interface, resulting in Bybit transferring the funds to the bad actors’ wallets. OKX's law enforcement response team established a direct communication channel with Bybit, and its legal team was in direct contact with Bybit’s lawyers to assist in the aftermath of the hack.

OKX's denial of regulatory investigation and its role in laundering stolen funds highlights the intricate and evolving landscape of cryptocurrency regulation and security. The exchange's proactive measures and commitment to assisting Bybit demonstrate its efforts to mitigate the impact of the hack and uphold its reputation in the industry. The complex nature of cryptocurrency regulations and the ongoing threat of cyber attacks underscore the need for exchanges to remain vigilant and proactive in their security measures.