Privacy-focused cryptocurrency platform eXch has announced it will shut down on May 1 following heightened international scrutiny over alleged links to North Korea’s Lazarus Group.
The decision comes after mounting pressure from what the platform describes as a coordinated transatlantic effort to dismantle the exchange and pursue legal action against its team.
In a statement published on online forum Bitcointalk, eXch said its internal vote led to a decision to “cease and retreat” rather than resist regulatory and legal pressure.
“None of us want to cause any harm to innocent people or this forum,” the team wrote. It added that the platform was never intended to facilitate money laundering or terrorism, despite recent accusations.
Bybit Hack Puts Spotlight on eXch’s Role in Moving Stolen Funds
The move follows an investigation into the Feb. 21 hack of crypto exchange Bybit, which resulted in the theft of about $1.5b worth of digital assets. Analysts have called it the largest crypto theft to date. Blockchain forensics linked portions of the stolen funds to eXch, prompting suspicions that the non-KYC exchange may have served as a laundering channel for the North Korean hacking group.
eXch denied involvement in any large-scale laundering activity. However, it acknowledged that a small fraction of the stolen assets passed through its platform. The company said this was an isolated incident and promised to donate any fees collected from the transaction to the public good.
The platform also pushed back against calls from Bybit to freeze the remaining stolen funds. In communications with Bybit’s risk team, eXch cited frustration over prior incidents where it claims Bybit froze funds belonging to its users without explanation. The exchange suggested this history contributed to its reluctance to comply with the recent request.
Once Touted for Privacy, eXch Now Caught in AML Crosshairs
eXch, known for allowing anonymous trading without identity verification, has drawn criticism in the past for enabling illicit flows. However, it had maintained that it operated within the bounds of privacy and decentralization principles embraced by parts of the crypto community.
The latest developments have brought renewed scrutiny to non-KYC platforms, many of which are now grappling with stricter enforcement under international anti-money laundering frameworks. For eXch, the pressure appears to have reached a breaking point.
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