Frankfurt Prosecutors Seize eXch Platform Over Multiple Crypto Exploits, Including Bybit Hack

German authorities have closed the eXch crypto exchange after a joint investigation. The Frankfurt Public Prosecutor’s Office and the BKA led the operation. They seized €34 million in digital assets and over eight terabytes of data. The platform lacked any AML controls and allowed anonymous transactions. Investigators suspect it facilitated illicit cyber activity by enabling untraceable financial flows. Officials had scrutinized the platform for years before acting. Its operators offered no identity verification, complicating enforcement efforts. Authorities highlighted the importance of AML in digital asset platforms.

How eXch Became a Hub for Anonymous Crypto Swapping

eXch crypto exchange was launched in 2014 as a swapping service with no identity checks. Users could swap cryptocurrencies on both the clearnet and darknet. Criminal groups promoted it for its strong anonymity features. The platform was designed with no KYC or transaction monitoring. Authorities now allege it handled funds tied to the Bybit crypto hack and the FixedFloat exploit. The absence of oversight made it a key channel for laundering illicit cryptocurrency. Its design concealed user addresses and transaction history. Operators offered API access for third-party liquidity providers.

Authorities Seize Digital Assets Tied to Major Crypto Thefts

Authorities described the takedown as one of the BKA’s largest digital asset seizures. They said some seized assets were linked to the $243 million Genesis Creditor theft. Investigators also believe criminals laundered part of the $1.5 billion stolen from the Bybit platform through the eXch crypto exchange. The operation highlights the growing abuse of cryptocurrency in large-scale financial crimes. Officials began extending their probe to map connections among cybercrime networks and identify those behind these significant breaches. The investigation aims to hold all responsible actors accountable. Authorities promised deeper insights into the attack methods used.

In a public press release, the BKA stressed how cybercrime now operates at an industrial scale. The Central Office for Combating Internet Crime (ZIT) and the Federal Criminal Police Office (BKA) joined Dutch authorities in a cross-border collaboration. They acted just as eXch operators announced a voluntary shutdown. Authorities refuted claims of hostile surveillance, citing their own evidence. They seized the server infrastructure and relevant data during the coordinated raid. The BKA’s Central Office for Combating Internet Crime led forensic analysis. Officials warned that regulators must tackle such platforms to prevent unregulated financial systems from spreading. The action showed global law enforcement’s resolve against illicit crypto operations.

eXch Defends Its Privacy Model Amid Regulatory Crackdown

Before the shutdown, eXch crypto exchange operators released a final statement defending their platform. They said they aimed to offer privacy-focused alternatives, not enable crime. They denied supporting money laundering or terrorism. Instead, they argued regulators unfairly targeted privacy services. Critics countered that the lack of KYC and data retention invited misuse. They noted the platform’s design made it vulnerable to incidents like the FixedFloat exploit. They appealed for respect for digital privacy as a basic right. Observers believe features allowing unchecked transactions damaged eXch’s credibility.

eXch also criticized AML-compliant services for failing to stop financial crimes. Operators claimed central screening did not improve security. They insisted that privacy services fought unfair labeling as mixers. Regulators, however, argued that platforms like this fuel underground economies. They said unregulated tools let stolen funds from the Bybit crypto hack circulate unseen. Officials warned that such services expand opportunities for money laundering. Critics emphasize that the responsibility to combat illicit finance outweighs absolute anonymity. Law enforcement stresses that cooperation between regulators and industry is essential.

Crackdown on Unregulated Crypto Platforms Raises Concerns

After closure, eXch said it would donate 50 BTC to support privacy tech projects. They named Monero, MWEB, Dash, Tornado Cash, and Thorchain as key technologies. The fund aims to back lightweight privacy wallets and decentralized liquidity solutions. eXch plans to grant temporary API access during a management transition. They encouraged partners to build their own infrastructure for liquidity. This case underscores the clash between privacy rights and regulators’ concerns over crime. Global law enforcement may target more unregulated platforms after this precedent. Stakeholders now debate ethical and legal balances in digital finance.