Crypto Exchange eXch Denies Money Laundering Allegations After Bybit Hack

• Bybit lost $1.4B in a massive hack linked to the Lazarus Group.
• eXch denies laundering, calling allegations “FUD” and defending its role.

Non-KYC crypto exchange eXch has denied accusations of laundering funds from the $1.4 billion Bybit hack, despite blockchain analysts linking stolen assets to its platform. While eXch admitted that some funds from the hack were processed, it insisted the case was “isolated.”

Bybit suffered one of the largest crypto thefts on February 21, 2025, when hackers drained over $1.4 billion from its Ethereum cold wallet. Investigators, including ZachXBT and Nick Bax, claim Lazarus Group, a North Korean state-sponsored hacking entity, was behind the attack.

Blockchain data shows ETH reserves on the exchange surged following the hack. Security firm SlowMist and on-chain analysts reported that over 20,000 ETH moved through eXch within 24 hours, exceeding its usual 800 ETH daily volume.

Nick Bax, a member of the Security Alliance, alleged that the exchange processed $30 million in hacked funds on the day of the attack. ZachXBT claimed eXch laundered $35 million, mistakenly sending 34 ETH ($96,000) to another exchange’s hot wallet.

eXch Rejects Bybit’s Freeze Request

In a February 23 post on Bitcointalk, eXch rejected allegations of money laundering. The exchange called the claims “FUD” and stated it “does not launder funds for Lazarus or DPRK.” It admitted that a small portion of stolen funds entered its wallet, but insisted it was the only transaction processed and would donate any fees to open-source privacy projects.

Meanwhile, Bybit has managed to freeze over $42 million in stolen assets through coordinated efforts. However, it faced resistance from eXch, which refused to block flagged wallet addresses. eXch accused Bybit of “undermining its reputation” by freezing its users’ funds in past transactions.

Bybit CEO Ben Zhou called for a unified industry response to prevent hackers from cashing out stolen assets. “At this point, it’s not about Bybit. It’s about our general approach toward hackers,” Zhou posted on X (formerly Twitter).

SlowMist urged crypto platforms to tighten risk controls on funds originating from eXch. Analysts warn that the Lazarus Group continues to exploit non-KYC exchanges to launder stolen funds, raising concerns over crypto security policies.

Highlighted Crypto News Today
How Long Will XRP Teeter Below $3?