German authorities have seized a staggering $38 million in cryptocurrency from the eXch platform, believed to be tied to the infamous Bybit hack, marking a significant crackdown on crypto-based money laundering. Announced on May 9 by Germany’s Federal Criminal Police Office and the Frankfurt prosecutor’s office, the operation involved a diverse array of digital currencies, including Bitcoin, Ether, Litecoin, and Dash. This bold move signals one of the largest crypto confiscations in German history.
An Unraveling Web of Crypto Deception
The eXch platform, operational since 2014, allegedly functioned as a clandestine “swapping” service, allowing users to shuffle crypto assets without adhering to Anti-Money Laundering (AML) protocols. According to officials, the platform facilitated approximately $1.9 billion in crypto transactions, some of which were flagged as being “of criminal origin.” Among these were assets laundered from the Bybit hack, which saw a whopping $1.5 billion stolen on February 21, 2025. But here’s the catch—eXch didn’t just stop at Bybit.
Crypto analyst ZachXBT has been among the first to expose eXch’s involvement, highlighting its role in laundering millions from other cryptographic exploits like Multisig and FixedFloat. “Countless phishing drainer services over the past few years with refusal to block addresses and freeze orders,” ZachXBT noted, painting a picture of a platform deeply entrenched in illicit activities.
The Mechanics of Laundering
So, how exactly did the funds flow? According to sources, the notorious Lazarus Group, implicated in the Bybit hack, transferred 5,000 ETH to a new address. From there, the laundering process began in earnest via eXch, using it as a centralized mixer, and further bridging funds to Bitcoin through Chainflip. This complex web of transactions illustrates the sophisticated methods employed to obfuscate the origins of stolen assets.
The authorities’ move to shut down eXch comes after the platform’s adamant denial of any wrongdoing. In a Bitcoin Talk post from mid-April, eXch announced it would cease operations by May 1, citing a hostile environment and misinterpretation of its goals. “Even though we have been able to operate despite some failed attempts to shut down our infrastructure […], we don’t see any point in operating,” they wrote, hinting at the mounting pressure from law enforcement.
Broader Implications for the Crypto Sphere
This landmark seizure raises critical questions about the future of crypto regulation and the ongoing battle against digital financial crime. Benjamin Krause, a senior public prosecutor, emphasized the significance of targeting platforms that offer “quick and anonymous opportunities for money laundering.” He underscored the role of crypto swapping in the underground economy, where it is utilized to conceal funds from illegal activities—ranging from hacking to trading in stolen payment card data—and making them accessible to wrongdoers. For a deeper dive into the regulatory implications, see our coverage of the UK’s FCA seeking public and industry views on crypto regulation.
The ripple effects of this action may well extend beyond Germany, prompting international discussions on how best to regulate and monitor cryptocurrency exchanges. The crypto community is certainly abuzz, with observers speculating whether more robust regulatory frameworks are on the horizon.
Looking Ahead: A Changing Landscape
As the dust settles, the question remains: Will this seizure be a turning point in the war against crypto crimes, or merely a temporary setback for bad actors? The crypto world is notoriously volatile, and while this move by German authorities is a significant victory, it also highlights the pressing need for global cooperation in combating digital asset laundering. This follows a pattern of institutional challenges, as explored in our recent coverage of crypto token failures soaring, with 1 in 4 launched since 2021 dying in Q1.
The eyes of the crypto community and regulators alike are now fixed on how this case will influence future legislation and enforcement strategies. With the pace at which the digital currency landscape evolves, one can’t help but wonder how long it will be before the next eXch emerges from the shadows.
Source
This article is based on: Germany seizes $38M in crypto from Bybit hack-linked eXch exchange
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
