Key Takeaways
- OKX halts DEX services in the EU amid reports of regulatory scrutiny.
- The exchange denies any investigation and insists it follows all applicable regulations.
- OKX accuses Bybit of spreading misinformation following the $1.5 billion Bybit hack.
OKX is temporarily suspending its decentralized exchange (DEX) aggregator services in the European Union, citing regulatory concerns.
The suspension comes amid reports that EU regulators are investigating its Web3 services after hackers used them to launder stolen funds from the $1.5 billion Bybit hack.
While OKX has denied being under investigation, it says the suspension is part of an effort to strengthen compliance measures.
OKX Denies Investigation
OKX has pushed back against claims that it is facing an EU probe, instead accusing Bybit of spreading misinformation about the situation.
The exchange insisted that its Web3 wallet services are similar to those offered by other industry players and that it complies with regulations.
As part of its security efforts, OKX said it had implemented a hacker address detection system for its Web3 DEX aggregator, which tracks illicit addresses and blocks them in real time on its centralized exchange (CEX).
The exchange also claimed to have frozen funds linked to the Bybit hack.
The Bybit hack, one of the largest in crypto history, was attributed to the North Korean Lazarus Group.
Unlike previous attacks, in which they used crypto mixers, the hackers turned to DEX platforms, laundering nearly $1.1 billion by converting stolen ETH into BTC via ThorChain and other DeFi services.
OKX Challenges Bloomberg Report on EU Scrutiny
A March 11 Bloomberg report stated that European regulators were investigating OKX’s Web3 services and considering penalties under the EU’s Markets in Crypto-Assets (MiCA) regulations.
The report suggested that a vulnerability in OKX’s system allowed hackers to move $100 million in stolen funds undetected.
OKX, however, refutes these claims.
“We will continue to help Bybit strengthen the industry,” the exchange said. “But we absolutely refute the false claims by Bybit that are leading to misinformation about our role in what began as a serious security vulnerability on their exchange.”
While fully decentralized platforms are exempt from MiCA regulations, sources familiar with the matter say OKX’s Web3 services could still fall under EU oversight, potentially exposing the exchange to further regulatory scrutiny.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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