OKX Denies EU Investigation Claims Amid Bybit Hack Fallout

In a stunning turn of events, OKX has found itself embroiled in controversy following the massive $1.5 billion Bybit hack. The exchange has vehemently denied being under investigation by EU regulators, contrary to a recent Bloomberg report linking OKX’s Web3 service to the laundering of stolen funds.

• OKX denies EU investigation claims
• Bloomberg report links OKX to Bybit hack
• OKX freezes stolen funds, blocks hacker addresses
• Bybit hack attributed to North Korea’s Lazarus Group

Bloomberg reported that OKX’s Web3 service—a type of service that allows users to interact with decentralized applications and blockchain technologies—was allegedly used to launder nearly $100 million in ETH from the Bybit hack. However, OKX has been quick to refute these claims, with their chief marketing officer, Haider Rafique, stating, “OKX has clarified that it is not being investigated.” The exchange emphasized that its Web3 wallet services are similar to those offered by other industry participants, and they are not under scrutiny.

In response to the hack, OKX took decisive action by freezing the stolen funds moving into its centralized exchange and developing a feature to block addresses associated with the hackers. OKX isn’t just saying ‘no’ to EU investigations; they’re practically shouting it from the rooftops. They’ve also accused Bybit of spreading ‘misinformation’ among journalists, escalating the tension between the two exchanges. Despite this, OKX has pledged to continue assisting Bybit in dealing with the aftermath of the hack, while firmly rejecting Bybit’s alleged false claims against them.

The Bybit hack, occurring on January 27, 2025, has been attributed to North Korea’s notorious Lazarus Group. This group, known for its sophisticated laundering techniques, has already laundered $300 million of the stolen funds, with 20% of the funds reported as “gone dark” and unlikely to be recovered. The total loss from the hack amounts to a staggering $1.5 billion, shaking the crypto community and drawing the attention of EU regulators. The regulators are assessing whether OKX’s Web3 service falls under the Markets in Crypto Assets Regulation (MiCA) framework—a new set of rules from the EU to regulate cryptocurrencies, focusing on investor protection and preventing financial crimes.

MiCA, adopted by the EU in June 2024, aims to provide a unified regulatory framework for crypto assets. The applicability of MiCA to decentralized platforms like OKX’s Web3 service remains a contentious issue, reflecting the ongoing debate between privacy and regulation in the crypto space. OKX has secured a full MiCA license to operate across all EU member states, but the scrutiny of their Web3 service underscores the challenges of fitting decentralized technologies into existing regulatory frameworks.

Public blockchain tracking has played a crucial role in the aftermath of the hack. Bybit has launched a Lazarus Bounty program, encouraging the public to assist in tracking and freezing the stolen assets. This initiative has already led to the identification and freezing of $40 million of the stolen funds, showcasing the power of community cooperation in the crypto world.

The incident also highlights the varying levels of cooperation among crypto exchanges in stopping the laundering of stolen funds. While OKX took swift action, other exchanges like eXch faced criticism for their initial responses, although they later claimed cooperation. Johann Roberts from eXch argued that identifying crypto customers undermines the privacy benefits of cryptocurrencies, reflecting a broader debate within the industry.

Dr. Tom Robinson, co-founder of Elliptic, emphasized the sophistication of the Lazarus Group’s laundering operations, noting that they work nearly 24 hours a day and are highly skilled at converting crypto into cash. He stressed the urgency of tracking the funds, stating, “every minute matters.” Dr. Dorit Dor, a cyber security expert at Check Point, added that North Korea’s closed economy has led to the development of a successful hacking and laundering industry, and they are not deterred by the negative perception of cybercrime.

The Bybit hack serves as a stark reminder of the vulnerabilities within cryptocurrency exchanges and the potential for such platforms to be used for illicit activities like money laundering. While increased regulation might prevent such hacks, it could come at the cost of privacy—a core value of the crypto community. As the industry grapples with these challenges, the actions of exchanges like OKX and the regulatory responses from bodies like the EU will continue to shape the future of crypto. OKX and Bybit are playing the blame game, and it’s like watching two kids pointing fingers after breaking a vase.

OKX has clarified that it is not being investigated.

OKX insists that its own Web3 wallet services are actually no different from those that are being offered by other industry participants.

OKX claims that it froze the stolen funds that were moving into the centralized exchange and developed a feature to block the addresses associated with the bad actors behind the hack.

The exchange has now accused Bybit of spreading ‘misinformation’ among journalists.

OKX has stressed that it will continue to help Bybit to deal with the aftermath of the hack.

However, the exchange has rejected the ‘false claims’ that were allegedly made by Bybit.

Key Takeaways and Questions

• Is OKX currently under investigation by EU regulators?

  No, OKX has denied being under investigation by EU regulators.

• What was the alleged involvement of OKX in the Bybit hack?

  Bloomberg reported that OKX’s Web3 service was used by Bybit hackers to launder funds, but OKX has denied these claims.

• What regulatory framework are EU regulators assessing in relation to OKX?

  EU regulators are assessing whether OKX’s Web3 service falls under the Markets in Crypto Assets Regulation (MiCA) framework.

• How did OKX respond to the Bybit hack?

  OKX froze stolen funds moving into their centralized exchange and developed a feature to block addresses associated with the hackers.

• What accusations did OKX make against Bybit?

  OKX accused Bybit of spreading misinformation among journalists.

• Who is believed to be behind the Bybit hack?

  The Bybit hack is believed to be carried out by North Korea’s Lazarus Group.

• How much of the stolen funds from the Bybit hack have been laundered?

  Approximately $300 million of the $1.5 billion stolen funds have been laundered.