EU Regulators Investigate OKX Over Alleged Role In Bybit Hack Money Laundering

The European Union regulators are investigating a service offered by crypto exchange OKX that may have facilitated the laundering of $100 million linked to the Bybit hack. This scrutiny is focused on OKX’s decentralized finance platform and its wallet service. OKX had recently secured full approval under the Markets in Crypto-Assets (MiCA) regulatory framework, allowing it to operate across all EU member states, but now faces potential penalties if found in violation.

Bybit CEO Ben Zhou has alleged that a portion of the stolen funds from the $1.5 billion hack was funneled through OKX’s Web3 proxy, making it untraceable. However, OKX has denied any wrongdoing and dismissed claims of an ongoing EU investigation, stating that they provide a self-custody wallet service/swap feature like other major crypto exchanges.

The Bybit hack, attributed to the Lazarus Group from North Korea, is considered the largest crypto theft to date. North Korean hackers have successfully laundered at least $300 million from the heist, with 20% of the stolen funds already “gone dark” and unlikely to be recovered. Bybit has launched a Lazarus Bounty Program to track and freeze stolen assets, with some success in identifying and freezing part of the stolen funds.

Despite efforts to recover stolen assets, experts warn that retrieving the remaining assets will be challenging due to North Korea’s expertise in hacking and money laundering techniques. EU regulators are investigating whether OKX played a role in money laundering related to the Bybit hack, while OKX maintains its innocence and defends its Web3 wallet services against allegations of misconduct.