OKX Faces Allegations of Allowing Bybit Hackers to Launder Stolen Funds
OKX, a prominent cryptocurrency exchange, has recently come under scrutiny amidst allegations that its Web3 service facilitated the laundering of $100 million in stolen funds by Bybit hackers. European regulators are reportedly examining OKX for potential violations of the Markets in Crypto-Assets (MiCA) regulation and considering penalties, including revoking the exchange’s MiCA authorization.
Claims of Regulatory Scrutiny
According to a report by Bloomberg News, regulatory authorities are investigating whether OKX’s Web3 platform falls within the scope of MiCA regulations. Some officials argue that OKX’s integration of Web3 services and terms of use make it subject to MiCA compliance requirements. The authorities are also evaluating potential penalties following the laundering of stolen funds through OKX’s decentralized services.
OKX Denies Allegations
In response to these allegations, OKX has denied claims of regulatory scrutiny and emphasized that its Web3 service is a self-custody wallet service/swap feature designed to enhance user efficiency. The exchange refuted the article as misleading and clarified that it is not under investigation in the EU. OKX also detailed the steps it took following the Bybit hack, including freezing associated funds and blocking addresses linked to the attack from using its decentralized services.
OKX’s Response to the Hack
OKX CEO, Star Xu, criticized Bybit’s handling of the security breach and attributed the incident to Bybit’s vulnerabilities rather than any shortcomings on OKX’s part. Xu highlighted the immediate measures taken by OKX to assist Bybit, such as freezing associated funds and developing features to block malicious addresses. The exchange has been cooperating with Bybit to track and mitigate the movement of stolen assets.
The Bybit hack occurred while the exchange was transferring a significant amount of Ethereum (ETH) to a cold wallet using Safe’s multi-signature service. However, a compromised laptop allowed hackers to inject malware into the wallet interface, leading to the transfer of funds to the hackers’ wallets.
Moving Forward
Despite the allegations and regulatory scrutiny, OKX remains steadfast in its commitment to compliance and security. The exchange continues to work closely with authorities and industry partners to enhance its security measures and prevent future incidents. OKX’s dedication to protecting user funds and maintaining regulatory compliance underscores its commitment to fostering trust and transparency in the cryptocurrency space.
In conclusion, while facing challenges and allegations, OKX’s swift response to the Bybit hack and proactive measures demonstrate its commitment to safeguarding user assets and upholding industry standards. As the cryptocurrency landscape evolves, exchanges like OKX play a crucial role in ensuring the security and integrity of digital assets for investors worldwide.