The notorious crypto mixer eXch may have officially announced its shutdown, but a recent report from TRM Labs reveals that the platform is still functioning as a laundering channel for illicit funds. Despite removing all public-facing infrastructure, including clearnet and dark web domains, eXch’s backend, specifically its API access, remains operational, enabling ongoing fund movements consistent with its mixed-pool laundering model.
TRM’s investigation links eXch to major cybercriminal operations, including the Lazarus Group’s $1.5 billion Bybit hack and child sexual abuse material (CSAM) threat actors. The platform’s architecture, which includes a proprietary mixed-pool system, allows users to deposit funds into liquidity pools that make tracing their origins nearly impossible. This system operates similarly to cryptocurrency swap services, blending illicit and clean funds in a way that obscures their true source.
Despite facing scrutiny and allegations of laundering funds for the Lazarus Group, eXch has denied any wrongdoing and downplayed its involvement in the Bybit hack. On-chain analysts have estimated that the exchange processed millions in laundering volume, further implicating it in illicit activities. Despite these accusations, eXch has continued to operate, even as it faces pressure to freeze stolen assets and comply with law enforcement actions.
The recent suspension of operations and leadership transition at eXch raise questions about the platform’s future. While a new team is set to take over from the original leadership, concerns remain about the platform’s willingness to launder criminal proceeds. The continued API access suggests that threat actors can still utilize eXch’s anonymization tools, undermining its claims of reform.
In conclusion, eXch’s ongoing operation as a laundering channel for illicit funds highlights the challenges of regulating the cryptocurrency industry. Despite facing allegations and pressure to comply with law enforcement actions, the platform continues to facilitate illegal activities. As the industry grapples with these issues, it is essential for regulators and stakeholders to remain vigilant in monitoring and addressing illicit activities in the crypto space.