Crypto exchange eXch to shut down May 1 amid allegations of laundering $35M from Bybit hack
Cryptocurrency exchange eXch announced it would cease operations on May 1 following reports that it was involved in laundering funds from a Bybit hack.
The platform revealed that most of its management team voted to “cease and retreat” after allegations surfaced that North Korea’s Lazarus Group used the platform to launder approximately $35 million of the $1.4 billion stolen in a Bybit exploit.
eXch blames global crackdown and misinterpretation of Its mission for shutdown
According to eXch, it was under an “active transatlantic operation” that targeted its shutdown and potential legal action.
eXch said that while it had remained operational despite numerous failed attempts to dismantle its infrastructure — which it acknowledged were part of a current operation — it no longer felt it was worth operating in an unfriendly environment. It said it was being targeted by Signals Intelligence (SIGINT) due to confusion over its mission.
At first, the platform rebuffed reports by crypto sleuths that it had laundered digital assets for the Lazarus Group. However, it acknowledged handling an “insignificant portion of funds” from the February attack.
Individuals from eXch’s management team emphasized its focus on user privacy in announcing the shutdown, claiming that some exchanges “abuse customers with nonsensical policies” in their attempts to fight money laundering.
Bybit recovers after record $1.5B hack as regulators signal softer stance on crypto
On February 21, 2025, a group of hackers from North Korea stole the largest cryptocurrency heist in history after stealing $1.5 billion in Ethereum tokens from the Dubai-based cryptocurrency exchange ByBit. The hackers exploited a free storage software product that ByBit used to move Ethereum to another location, most likely coupled with phishing attacks to access control and download malware.
On February 22, CEO Ben Zhou assured that the exchange had the resources to “cover the loss” if the funds weren’t recovered. However, the company later revealed plans to shut down some of its Web3 services and close its NFT marketplace.
By April 10, Bybit had regained its market share achieved before the hack: roughly 7%. The exchange paid more than $2 million to bounty hunters providing information that could be used to freeze some of the funds traceable to other platforms, which was estimated to be roughly 89% of the $1.4 billion as of March 20.
That effort rewarded tipsters who helped freeze stolen tokens before they could be laundered through smaller exchanges or converted into fiat.
Bybit has since recovered its pre-hack market share, regaining roughly 7% of global crypto volume by April 10.
Fed chair signals softer crypto rules as digital assets enter the mainstream
Federal Reserve Chair Jerome Powell has signaled that regulators may soon take a more open approach to digital assets, even as enforcement efforts continue to intensify.
“We’ve taken a conservative stance, especially after the wave of failures and frauds,” Powell said. “But we’re entering a new phase.”
Powell pointed to growing bipartisan interest in regulating stablecoins, signaling that Congress may soon revisit a legal framework that stalled in past sessions. He said any new policy must balance innovation with risk controls, especially as crypto becomes more intertwined with the traditional banking system.
“The climate is changing,” Powell noted. “You’re seeing digital assets move into the mainstream.”
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