eXch Closes May 1 Amid $35M Laundering Scandal

Privacy-focused crypto exchange eXch has announced its official closure on May 1, 2025, amid escalating legal scrutiny over its alleged involvement in laundering $35 million tied to the Bybit hack. Law enforcement agencies across the U.S. and Europe believe the non-KYC exchange facilitated illicit transactions for North Korea’s notorious Lazarus Group.

eXch is accused of playing a role in processing stolen assets from the February Bybit cyberattack, one of the year’s largest crypto breaches. The Lazarus Group, a state-sponsored North Korean cybercrime entity, has been identified as the perpetrator. Investigators claim the group funneled about $35 million through eXch, exploiting the exchange’s lax identity verification protocols. Though eXch initially denied involvement, it later conceded that a “small fraction” of stolen assets may have passed through its platform. It denied facilitating the laundering intentionally but admitted that minimal user verification left it vulnerable to exploitation by malicious actors.

The eXch exchange shutdown follows a coordinated compliance operation by U.S. and European authorities targeting non-KYC platforms. The probe led to asset seizures and legal subpoenas, pressuring the exchange’s leadership to dismantle global operations. In a public statement, eXch cited “unsustainable legal pressure” and a rising “enforcement risk” as the key reasons for its decision to close. Despite the exit, eXch sought to frame the shutdown as an ideological stand for privacy. In one final act, the platform pledged 50 BTC (~$3.3M) to support open-source privacy software, aiming to leave behind a legacy aligned with decentralization and user autonomy.

This incident could reshape the future of non-KYC exchanges and privacy-first platforms. Analysts suggest that regulatory bodies may now pursue more aggressive action against platforms that lack anti-money laundering (AML) controls, viewing the eXch shutdown as a precedent-setting moment. Privacy advocates, however, argue that enforcement targeting such platforms threatens the core principles of decentralized finance. They warn that censoring privacy tools undercuts the mission of creating an open, permissionless financial system, raising difficult questions about the balance between freedom and compliance in crypto’s next chapter.

As the eXch exchange shutdown approaches its May 1 deadline, users are being urged to withdraw their funds. The case represents a critical turning point for the crypto industry, highlighting both the increasing regulatory risks for non-KYC exchanges and the ethical debate around privacy and accountability. Whether this marks the start of a broader crackdown or sparks a privacy-tech renaissance remains to be seen—but either way, crypto will not remain unchanged.