eXch Exchange Closes: Accused of Helping Lazarus Group Launder Money From Bybit Hack

Bybit Hack: The Biggest Hit to the Crypto Industry

On February 21, 2025, Bybit – a leading cryptocurrency trading platform – became the target of the largest hack in history, with estimated losses exceeding $1.46 billion, mostly in Ethereum. The Lazarus Group, a hacker group believed to be linked to North Korea, is suspected of being behind the attack.

They exploited a vulnerability in Bybit's cold wallet system through malicious JavaScript code, forging transactions to withdraw funds. Lazarus Group then used tens of thousands of cryptocurrency wallets to disperse and launder huge amounts of money, in which eXch is accused of being an important "bridge" in the money laundering chain.

The Role of eXch

Blockchain analytics data shows that over $75 million in stolen assets from Bybit have been transferred through eXch, with Adele of eXch coming under fire for failing to cooperate in freezing the illicit transactions, despite thousands of requests from Bybit and analytics firms.

As an exchange that does not require KYC, eXch was accused of deliberately ignoring the flow of dirty money, leading to a strong backlash from the crypto community. Initially, eXch denied the accusations, but when faced with clear evidence, they admitted to handling some of the money from the hack, leading to the decision to shut down to avoid legal risks.

Reasons for Closure

Blockchain transparency exposed eXch’s role in money laundering. Independent analysts noted that Ethereum trading volume on eXch spiked from 800 ETH/day to 20,000 ETH immediately after the Bybit hack, indicating illicit funds flowing through the platform. This evidence made it impossible for eXch to continue denying responsibility. At the same time, its association with Lazarus Group – an organization sanctioned by many countries – put eXch at risk of legal investigation. Pressure from the crypto community and regulators forced the exchange to choose to shut down to limit damage.

eXch operates with a no-KYC model, attracting users who want to protect their privacy but inadvertently facilitating illegal activities. The lack of anti-money laundering (AML) measures makes eXch an ideal destination for hackers. Compared to major exchanges such as Binance or Bitget, which quickly freeze suspicious assets, eXch takes almost no action to prevent it, leading to a loss of trust from users and partners.

The Bybit hack not only caused financial damage but also shook confidence in the crypto industry. Bybit responded by offering large bounties to recover assets and partnering with blockchain analysis organizations to trace the flow of funds. While other exchanges like Bitget helped freeze some of the illicit assets, eXch was isolated due to lack of cooperation, leaving them in a situation where they could no longer operate.