Followin' the recent allegations that the exchange eXch has allowed the North Korean hacker group Lazarus to launder funds from the Bybit hack, the exchange has denied involvement in money laundering activities. They have acknowledged that a small portion of the stolen funds did flow into their platform, but emphasized that this was an "isolated incident" and refused to provide further details. The security team SlowMist has called for exchanges to strengthen risk control and be vigilant about funds coming from eXch, as a large amount of ETH has been converted to other assets such as BTC and XMR through cross-chain platforms like Chainflip, THORChain, LiFi, DLN, and eXch. In response, eXch has refuted the allegations, stating that they did not launder money for Lazarus or North Korea, and that these accusations come from those who wish to see decentralized applications lose on-chain privacy, as they have long been opposed to decentralization and cryptocurrencies. However, data analysts have discovered that eXch's ETH reserves have seen a significant spike following the Bybit hack, with their ETH holdings increasing by around 900% and their daily ETH trading volume surging from the usual 800 ETH to over 20,000 ETH. This has led to suspicions that eXch may have been involved in laundering the stolen funds. Furthermore, eXch has refused to block the wallet addresses associated with the stolen funds, accusing Bybit of damaging their reputation after Bybit had previously labeled deposits from eXch as "high-risk." Bybit's CEO has responded by stating that this is not just Bybit's problem, but an industry-wide issue in dealing with hackers, and has urged eXch to reconsider and help prevent the outflow of these funds.

This event not only highlights the shortcomings of exchanges and various platforms in preventing malicious attacks, but also once again sounds the alarm on the loopholes in money laundering and regulation. Although decentralization and privacy protection are the core values of blockchain technology, when facing hacker organizations and illegal capital flows, how exchanges and the industry can strike a balance between privacy and compliance has become a major challenge.