eXch Denies Laundering Allegations After Bybit Hack Investigation

Highlights:

• eXch has denied laundering funds from the Bybit hack but has admitted a small amount passed through its platform.
• Blockchain analysts claim eXch processed millions in stolen crypto and converted assets linked to the Lazarus Group.
• Bybit has urged eXch to freeze stolen funds, but eXch is resisting due to past conflicts over frozen user assets.

Crypto exchange eXch has denied claims that they have laundered money for North Korea’s Lazarus Group. Their accusations came two days after crypto exchange Bybit suffered a $1.4 billion hack. In a February 23 statement on the Bitcointalk forum, eXch dismissed the claim and stated that they are not laundering money for Lazarus/DPRK.

The platform assured users that its operations remained unaffected. It also emphasized that all funds on the platform were secure. Although eXch denied being involved in the hack, it acknowledged that some stolen funds had passed through its system. According to the exchange, a small amount of the stolen funds ended up in its address 0xf1da…1123.

eXch said the small amount was an isolated case and not part of any larger plan. Moreover, the platform announced that any fees collected from the transaction would be donated for public benefit. The statement was issued in response to growing concerns on social media and among blockchain analysts.

Investigations Reveal Ties Between eXch and Stolen Crypto

On February 22, on-chain investigator ZachXBT claimed that eXch had laundered $35 million from the Bybit hack. He also revealed that 34 Ether (ETH), worth around $96,000, was mistakenly sent to another exchange’s hot wallet. Several blockchain security firms supported these allegations.

Security firm SlowMist reported that significant amounts of stolen ETH were converted into other cryptocurrencies through eXch. Similarly, Nick Bax from the Security Alliance estimated that the platform had processed around $30 million in transactions related to the Lazarus Group.

⚠️Given the significant amount of ETH already laundered through eXch into BTC, XMR, etc., platforms should tighten risk controls on any funds coming from there.

— MistTrack🕵️ (@MistTrack_io) February 23, 2025

Elliptic, a blockchain analytics firm, explained how the stolen assets are laundered by the Lazarus Group. In order to avoid the tokens being frozen by the issuers, the group swaps stolen tokens for native blockchain assets such as ETH. Once they manage to gain access, the hackers transfer the assets to other wallets and other blockchains. Additionally, they use crypto-mixing services like Tornado Cash to conceal transactions.

🚨 Elliptic Research: The Largest Theft in History – Following the Money Trail from the Bybit Hack 🚨

On Feb 21, 2025, $1.46 billion in crypto was stolen from Bybit, making it the largest crypto theft ever.

Elliptic has attributed the attack to North Korea’s Lazarus Group,… pic.twitter.com/pM6fOn6Bol

— Elliptic (@elliptic) February 24, 2025

Bybit and eXch Clash Over Asset Freezing Requests

After the hack, Bybit asked eXch to freeze the remaining stolen funds. eXch, however, refused the request due to previous conflicts with Bybit. The exchange pointed out previous incidents where Bybit froze funds belonging to eXch users without explaining.

At this point is really not about bybit or any entity, it's about our general approach towards hackers as an industry, really hope that @eXch can reconsider and help us to block funds outflowing from them. We are also getting help from Interpool and international regulatory… https://t.co/wRzN925X9l

— Ben Zhou (@benbybit) February 23, 2025

In an email exchange with Bybit’s risk team, eXch also questioned why it should assist an organization that has previously harmed its reputation. The exchange claimed that Bybit did not respond to messages in which they were seeking clarity on the situation.

The Lazarus Group is accused of stealing over $200 million in crypto between 2020 and 2023. Analysts have warned that the group is already converting the stolen ETH to Bitcoin and other coins. The laundering process might take more time due to the high volume of assets.

🚨 BREAKING: Crypto exchange eXch denies allegations of laundering money for North Korea’s Lazarus Group following the massive $1.4B Bybit hack.

🔹 eXch says all funds are safe.
🔹 Operations remain unaffected.

#Crypto #BybitHack #Lazarus #Bybit pic.twitter.com/aEYgSEVDRY

— Crypto Crown Sahil Dubey (@ICryptoCrown) February 24, 2025