TL;DR
- eXch denies laundering $35M for North Korea’s Lazarus Group but admits a small portion of stolen Bybit funds passed through its platform.
- Blockchain analysts claim significant amounts of ETH were converted on eXch, with allegations fueled by investigators and security firms.
- Bybit’s ongoing efforts to recover stolen funds face resistance from eXch, highlighting the need for industry cooperation in addressing crypto theft.
Crypto exchange eXch has firmly denied allegations of laundering funds for North Korea’s Lazarus Group following the $1.4 billion hack on Bybit. On February 23, eXch responded to the allegations in a statement shared on the Bitcointalk forum, stating, “We are not laundering money for Lazarus/DPRK.” The exchange assured users that its operations remain unaffected and that all funds on the platform are secure.
Admission of Small-Scale Involvement
eXch refuted any claims of participating in extensive money laundering activities but acknowledged that a minor fraction of the stolen money did flow through its platform. “An insignificant portion of funds from the Bybit hack eventually entered our address 0xf1da…1123,” the statement read. The exchange emphasized that this was an isolated incident and that any fees collected from the transaction would be donated for the public good.
Accusations from Blockchain Analysts
The allegations against eXch have been fueled by claims from blockchain analysts and security firms. On-chain investigator ZachXBT claimed that eXch had laundered $35 million from the Bybit hack and noted that 34 Ether (ETH), worth approximately $96,000, was mistakenly sent to another exchange’s hot wallet.
Other blockchain security firms, such as SlowMist, reported significant amounts of ETH being converted into other cryptocurrencies on eXch. Nick Bax from the Security Alliance estimated that the platform processed around $30 million in volume for the Lazarus Group.
Bybit’s Efforts to Recover Stolen Funds
Following the hack, Bybit has been working to recover the stolen assets. The exchange announced on February 23 that coordinated efforts had led to the freezing of over $42 million of the funds.
However, eXch has shown resistance to Bybit’s requests to block the remaining stolen assets. In a shared email with the Bybit risk team, eXch expressed frustration over previous incidents where Bybit allegedly froze funds belonging to its users without adequate explanation.
Industry Implications
The Bybit hack, described as the largest crypto theft in history, has raised concerns about the security of cryptocurrency exchanges. Bybit CEO Ben Zhou emphasized the need for industry cooperation in responding to hackers, urging eXch to reconsider its position to prevent a further outflow of the stolen funds.
