The cryptocurrency platform OKX made it known today that temporarily halted it has paused the operations of its DEX aggregator, due to concerted media campaigns and noticeable efforts by the Lazarus Group to exploit the platform.
After a whopping $1.5 billion was siphoned off in the Bybit breach, OKX Web3 has caught the eye of regulators over potential money laundering activities.
On March 17, OKX disclosed that the infamous North Korean hacker collective had engaged in a concerted drive to misuse its DeFi offerings. These events led the company to take decisive, consultative action with authorities, including halting its DEX aggregator services.
Hacks Are Common
Drawing on the typical strategies of Lazarus, it seems possible they were using OKX’s platforms to disguise ill-gotten gains, exploiting DeFi’s less rigorous customer due diligence standards.
OKX mentioned the pause allows them to integrate further upgrades to avert continued misuse.
Efforts are underway with blockchain explorers to remedy what has been termed as 'incomplete labeling,’ which misattributes trades to the aggregator instead of the base DEX.
OKX emphasized that its Web3 side is more of a DEX facilitator, helping users strike deals between various decentralized exchanges while not holding user funds.
“We’re here to link liquidity across diverse protocols, delivering a smooth peer-to-peer trading avenue,” the company specified.
OKX has intitiated a ‘hacker address detection system’ for its DEX and keeps tabs on hacker-associated addresses across its CEX, in real-time.
The OKX team calls out deliberate misrepresentation of their Web3 system, which they believe challenges both their reputation and the broader digital asset community.
OKX announces its continued commitment to innovation and call for increased transparency in the digital asset realm, hinting at future updates.
EU Regulators Probe OKX Web3’s Role
In the explosive fallout from the Bybit breach, OKX, like many other crypto entities, has backed the platform despite facing allegations of laundering stolen funds via Web3.
Bloomberg revealed European regulators are probing OKX's Web3 platform, due to suspicions about the Lazarus Group laundering $100 million in crypto, swiped from Bybit.
This inquiry kicks off after reports of a $1.5 billion hack slammed Bybit, marking it among the greatest heists in the cryptocurrency chronicles.
Bloomberg's article detailed investigations into whether OKX's Web3, which they position as a DeFi and self-custody tool, adheres to the EU’s incoming Markets in Crypto Assets (MiCA) rules, as Lazarus allegedly laundered stolen sums using it.
Reacting to Bloomberg’s narrative, Haider Rafique, Marketing Chief at OKX, argued in an X update that the coverage is skewed. He stressed that their Web3 platform operates akin to other similar self-custody solutions and exchange aggregators.
Rafique highlighted how OKX halted funds linked to the Bybit breach that hit their CEX and bolstered safety protocols to identify and block malicious accounts. They also collaborated with law enforcement and Bybit’s legal team to trace hacker wallets dynamically.
CEO of Bybit, Ben Zhou, who has been actively addressing the breach and ensuring transparency, noted there was confusion over sources in a recent Bloomberg piece.
He pointed out that Bybit didn't directly communicate with Bloomberg and it’s possible the data hailed from the Lazarus Bounty webpage tracking stolen assets’ movement.
