The dubious crypto mixing protocol eXch is planning to merge with an offshore entity and undergo a restructuring in order to escape scrutiny over the laundering of tens of millions taken from Bybit.
The centralized crypto mixing service eXch announced an update on Bitcoin Talk stating its intention to shift its operations from Belize, where it has been facing increased regulatory pressure due to its unwillingness to halt North Korea-linked hackers from laundering significant amounts stolen from the Bybit exchange.
The protocol shared that it would introduce “new shareholders and new management board members,” claiming that this adjustment would help “minimize risks for our founding team” while allowing it to continue its operations without “compromising our principles,” although it did not specify what those principles entail.
eXch also acknowledged that it is “conscious of an ongoing operation” targeting its services by “certain law enforcement agencies,” aiming to include the protocol on the OFAC sanctions list and confiscate its infrastructure.
“Since the bulk of it comes from U.S.-based agencies, we will revise our Terms of Service to notify our U.S. users not to use our platform and caution them about the legal risks involved in using a service like ours.”
eXch
In its efforts to stay below the radar, eXch has also announced plans to delist the two largest stablecoins by market cap—Tether (USDT) and USD Coin (USDC)—by July or August due to the risk of being blacklisted. The platform will instead shift to using DAI (DAI), an algorithmic stablecoin from MakerDAO, an Ethereum-based protocol.
The mixing service further indicated that it will now exclusively utilize dynamic addresses to avoid complications. Additionally, it will modify its Bitcoin aggregation address to complicate linking transactions back to eXch.
eXch has faced criticism for not cooperating with blockchain investigators who are attempting to assist Bybit in stopping North Korean hackers from laundering nearly $1.5 billion stolen earlier this year. Data from Bybit indicates that eXch laundered upwards of $94 million in stolen assets and disregarded requests to sever ties with the criminals involved.