What happened?
Despite announcing its shutdown, the crypto mixer known as eXch continues to operate clandestinely, mainly through its still-active backend API. TRM Labs’ investigation shows that even though public-facing aspects like websites have been taken down, the platform’s mixing services are still available. This ongoing activity has been linked to money laundering for major cybercriminal operations, including those involved in the Bybit hack and CSAM-related transactions.
Who does this affect?
This situation affects multiple stakeholders, including cryptocurrency users who rely on platforms for secure transactions, as well as entities fighting against financial crimes. Law enforcement agencies and regulators are also impacted, as they face challenges in tracking illicit funds. Additionally, it affects other crypto exchanges, like Bybit, which suffer from reputational damage and financial losses due to security breaches facilitated by such mixers.
Why does this matter?
The continued operation of eXch despite its announced shutdown highlights significant vulnerabilities in the cryptocurrency market’s ability to self-regulate. This undermines trust in the entire crypto ecosystem, potentially triggering increased scrutiny from regulators. Moreover, it poses risks to investors and legitimate platforms, as unchecked laundering activities can lead to heightened volatility and jeopardize efforts to mainstream cryptocurrency use.