OKX Suspends Web3 DEX Aggregator Amid Bybit Hack Laundering Allegations

OKX, a leading cryptocurrency exchange, has temporarily suspended its Web3 decentralized exchange (DEX) aggregator. This decision, announced on March 17, is aimed at enhancing security measures and preventing the misuse of its platform. The suspension follows investigations by European regulators into allegations that hackers linked to North Korea’s Lazarus Group used OKX Web3 to launder funds stolen in the recent Bybit hack.

The Bybit hack resulted in the theft of approximately $1.5 billion, with hackers allegedly using OKX Web3 to launder around $100 million of the stolen funds. European authorities are examining whether OKX Web3 falls under the jurisdiction of the Markets in Crypto-Assets (MiCA) regulatory framework and are considering potential penalties for the exchange. This investigation is part of broader discussions among regulators from all 27 European Union nations, who met on March 6 to address the issue.

OKX has responded to these allegations by stating that its involvement in the laundering process was due to incorrect labeling by blockchain explorers and other decentralized exchanges. The exchange is actively working with these explorers to ensure accurate transaction reporting and to prevent misidentification of its aggregator as the point of trade. OKX has emphasized that its aggregator does not custody user assets but merely provides access to liquidity across multiple decentralized protocols. The platform has also introduced a system designed to detect hacker addresses in real time and block them from accessing its centralized exchange.

OKX CEO Star Xu has highlighted the measures taken to combat misuse, including the implementation of prohibited markets’ IP blocking and a real-time black address detection and blocking system. These steps underscore the exchange’s commitment to enhancing security and transparency in the wake of the Bybit hack and the subsequent regulatory scrutiny.

The suspension of OKX Web3 aggregator underscores the complex regulatory landscape surrounding cryptocurrency exchanges and the importance of robust security measures. As regulators continue to assess the role of OKX Web3 in the Bybit hack, the exchange’s proactive response and commitment to transparency will be crucial in navigating the ongoing investigation and potential penalties. The situation serves as a reminder of the need for vigilance and cooperation between exchanges and regulatory bodies to ensure the integrity and security of the cryptocurrency ecosystem.