Crypto exchange eXch denies laundering Bybit’s hacked funds

Crypto exchange eXch has denied laundering money for North Korea’s Lazarus Group following a $1.4 billion Bybit hack on Feb. 21. 

In a Feb. 23 statement to the Bitcointalk forum, the eXch team said the exchange is “Not laundering money for Lazarus/DPRK,” adding that all of its funds were safe and operations unaffected by the Bybit hack.

In a previous post to the forum, the crypto exchange said that anyone stating otherwise is only spreading fear, uncertainty, and doubt (FUD). However, it did admit to processing an “insignificant portion of funds” from the hack. 

“The insignificant portion of funds from the Bybit hack eventually entered our address 0xf1da173228fcf015f43f3ea15abbb51f0d8f1123 which was an isolated case and the only part processed by our exchange, fees from which we will be donated for the public good,” the eXch team said.

“There are no other addresses on the Ethereum blockchain, aside from deposit addresses that interact with this address, that are associated with our exchange,” it added. 

The post was seemingly in response to allegations on social media that it had laundered over $30 million from the hack. 

In a Feb. 22 post to his investigations Telegram group, onchain sleuth ZachXBT said that eXch laundered $35 million of the funds stolen by North Korea’s Lazarus Group from Bybit and then accidentally sent 34 Ether (ETH) with $96,000 to a hot wallet of another exchange. 

Several other blockchain analysts and the security firm SlowMist have also accused eXch of receiving Ether from wallets associated with the Bybit hack.

Nick Bax, a member of the white hat hacker group the Security Alliance, said that by his “estimate, eXch did about $30M of volume for DPRK today.”

SlowMist also claimed there had been a “significant amount of ETH” converted into other cryptocurrencies on eXch.

Related: ‘Biggest crypto hack in history’: Bybit exploit is latest security blow to industry

Bybit’s Feb. 21 hack marks the largest crypto theft in crypto history, with attackers stealing more than $1.4 billion after gaining control of Bybit’s Ether multisig cold wallet.

Bybit continues to process all withdrawals, but its total assets have fallen by over $5.3 billion, according to DefiLlama data, including the $1.4 billion in stolen assets.

Efforts to freeze stolen Bybit funds 

In a Feb. 23 update to X, the exchange said through a “coordinated effort,” over $42 million of the stolen funds had been frozen.

However, Bybit has seemingly met resistance from eXch, according to a forum post from eXch.

In a post to the Bitcointalk forum, the eXch team shared its reply to an email from the Bybit risk team asking them to freeze the funds stolen in the hack. 

The team accused Bybit of freezing some of its users’ funds when they attempted to deposit over the last year, hurting its reputation, and then ghosting all messages sent to resolve the issue.

“In light of these circumstances, we would appreciate a clear explanation as to why we should consider providing assistance to an organization that has actually undermined our reputation,” the eXch team said in the email. 

Commenting on a screenshot of the forum post, Bybit CEO Ben Zhou said he hopes “eXch can reconsider and help us to block funds outflowing from them.”

“At this point is really not about Bybit or any entity; it’s about our general approach toward hackers as an industry,” Zhou said.

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