OKX has denied claims that European regulators are examining its Web3 service for allegedly allowing Bybit hackers to launder $100 million in stolen funds.
A recent Bloomberg News report claimed that authorities are analyzing potential violations of the Markets in Crypto-Assets (MiCA) regulation by OKX and are debating whether to impose penalties, including revoking the exchange’s MiCA authorization.
Claims of regulatory scrutiny
According to Bloomberg, regulatory authorities are assessing whether OKX’s Web3 platform falls within MiCA’s scope.
Some officials reportedly argue that OKX’s integration of Web3 services within its primary exchange and its terms of use make it subject to MiCA’s compliance requirements.Â
The article also claimed that authorities are considering potential penalties following the laundering of Bybit’s stolen funds through OKX’s decentralized services.
OKX called the article misleading and said it is not under investigation in the EU. It further emphasized that its Web3 service is a “self-custody wallet service/swap feature that serves as an aggregator to create efficiency for the users.”
OKX further addressed the allegations by detailing the steps it took following the Bybit hack.
OKX response to hack
According to the exchange, it implemented two immediate measures when the security breach occurred.
The first was freezing associated funds that entered its centralized exchange, while the second was developing a feature to block addresses linked to the attack from using its decentralized services.Â
The exchange also noted that it has been assisting Bybit in tracking and mitigating the movement of stolen assets.
Star Xu, OKX CEO, criticized Bybit’s handling of the situation, attributing the security breach to Bybit’s own vulnerabilities rather than any shortcomings on OKX’s. He said:
“I can’t understand why Bybit keeps making this ridiculous statement without showing understanding of basic facts about self-custody technology. Actually, Bybit built their own Web3 wallet and DEX base using our Wallet/DEX API.”
The Bybit hack occurred while the exchange was moving nearly $1.5 billion worth of Ethereum (ETH) to a cold wallet using Safe’s multi-signature service.Â
However, a Safe developer’s compromised laptop allowed hackers to inject malware into the wallet interface, resulting in Bybit transferring the funds to the bad actors’ wallets.
Xu further detailed the actions OKX took to assist Bybit, explaining that the exchange’s law enforcement response team established a direct communication channel with Bybit, and its legal team was in direct contact with Bybit’s lawyers.
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