Largest crypto theft in history draws global scrutiny, forcing non-KYC exchange eXch offline by May 1
Privacy-centric crypto exchange eXch has announced its permanent closure amid mounting international pressure following revelations that part of the $1.5 billion Bybit hack — the largest in crypto history — was funneled through its non-KYC platform.
The platform, once hailed by privacy advocates for enabling anonymous trading, now finds itself at the center of a global regulatory storm, with alleged links to North Korea’s Lazarus Group putting it in the anti-money laundering (AML) crosshairs.
“We’ve decided to cease operations, effective May 1, to avoid escalating legal and diplomatic pressure,” the team behind eXch posted in a final message on Bitcointalk, adding:
“We never intended to aid illicit activity. Our ethos has always been privacy, not crime.”
Bybit Breach Triggers Global Chain Reaction
The fallout began after the February 21st breach of Bybit, which saw over $1.5B in digital assets stolen. Blockchain analysts later traced portions of the stolen funds to eXch, raising alarms about its role — however unintentional — in the movement of illicit funds.
While eXch denied facilitating large-scale laundering, it admitted a “small volume” of tainted funds passed through its infrastructure. The exchange vowed to donate all collected fees related to the transactions to public interest organizations.
Exchange Defends Itself Against Bybit’s Pressure
eXch also criticized Bybit for what it called a “hypocritical” demand to freeze suspicious funds, referencing previous incidents where Bybit allegedly froze users’ assets without transparency.
“We refused to comply based on past bad faith actions by Bybit. That history matters,” eXch wrote.
The Privacy Paradox: Between Freedom and Regulation
Once praised for upholding the decentralized, KYC-free ideals of early crypto, eXch has long been a target of AML watchdogs. But with regulatory enforcement tightening globally, the space for such platforms is shrinking rapidly.
Analysts say the shutdown marks a critical moment in the privacy-versus-compliance battle, as non-KYC exchanges face mounting pressure under frameworks like the FATF Travel Rule and cross-border anti-terror financing mandates.
What This Means for Crypto Privacy
The closure of eXch signals an evolving crypto era where privacy-based platforms are under siege, and regulators show little tolerance for operational opacity — regardless of intent.
With law enforcement and regulators now focusing more intently on non-KYC models, industry experts warn:
“The age of regulatory arbitrage is closing. Privacy tools must adapt, or disappear.”
Stay updated on crypto’s regulatory battles at CryptoRadar360.com.
