On 9 May 2025, German authorities confiscated $38 million in cryptocurrency from eXch, a non-KYC crypto exchange. The Exchange platform was supposedly used to launder part of the $1.5 billion looted during the Bybit hack. The operation led by Germany’s Federal Criminal Police Office (BKA) and Frankfurt’s main prosecutor’s office saw the seizure of over eight terabytes of data and the platform’s closure.
eXch’s role in crypto laundering
eXch has enabled anonymous crypto swaps since 2014, whereby they bypass Anti Money Laundering (AML) protocols. It reportedly processed $1.9 billion in crypto-transfers, most associated with illicit activities. Investigators like ZachXBT connected the platform to many hacks, including the Multisig exploit and the $243 million Genesis creditor hack.
In a critical moment, authorities linked eXch to money laundering activities by North Korea’s Lazarus Group following the Bybit hack. Blockchain data reveals the group siphoned 5,000 ETH from Bybit’s breach through eXch and repeatedly swapped it between Bitcoin and Ether. However, eXch has denied intentional involvement, stating that the system filtered only an “insignificant portion” of stolen funds, but corporations such as TRM Labs and SlowMist have stated otherwise.
Industry impact and regulatory Wake-up call
The Bybit hack of Feb. 21, 2025, used a flaw in the exchange’s Ethereum multisig cold wallet. It caused an absolute loss and user panic, and Bybit was forced to stop $42 million of assets and promise to reimburse the lost Ether. The incident has been the most notable crypto theft in history.
Germany’s raid on eXch is the country’s third-largest-ever crypto seizure. Prosecutor Benjamin Krause underlined the necessity of interfering with instruments that facilitate anonymous laundering. The case carries a distinct message: non-compliant crypto services are now targets for law enforcement.
This is a call to action for strict compliance in crypto. As regulators tighten their scrutiny of platforms, they must develop a proper AML framework and Transaction monitoring to prevent possible misuse of the platforms. The eXch case is an alert and a watershed for the broader industry.
