OKX pauses Web3 aggregator in probe to $100 million butt hack laundering link in probe

OKX temporarily suspends its Web3 distributed exchange (DEX) aggregators following discussion with European regulators.

The exchange announced the decision on March 17, saying the move is part of efforts to strengthen security measures and prevent misuse of its platform.

Bibit Hack Connection

The suspension comes as European authorities are investigating allegations that hackers linked to North Korean Lazarus group used OKX Web3 to wash funds stolen in a recent Bibit Hack.

A recent Bloomberg report suggests that all 27 European Union regulators discussed the issue at the European Securities and Markets Agency (ESMA) meeting on March 6th, discussed the issue.

Bibit CEO Ben Zhou has confirmed that hackers will use OKX Web3 to wash around $100 million out of the $1.5 billion stolen.

In response, EU regulators are currently assessing whether the platform is under market jurisdiction in the crypto (MICA) regulatory framework and examining the possible penalties for OKX.

OKX response

OKX argues that involvement in the laundry process is due to false labeling through Blockchain Explorer and other decentralized exchanges.

The exchange said it would work actively with these explorers to ensure accurate transaction reports and prevent misidentification of aggregators as a point of trade.

Explained:

“We know that transparency is important, so we are working closely with Blockchain Explorer to fix incomplete labeling. Our goal is to ensure that explorers properly emphasize actual DEX processing transactions, rather than misidentifying aggregators as points of trade.”

The platform has also reiterated that its aggregators do not protect user assets, but simply provide access to liquidity across multiple decentralized protocols.

To further enhance security, the platform has introduced a system designed to detect hacker addresses in real time and block access to centralized exchanges.

OKX CEO Star Xu said in X:

“We're already deploying a lot of controls on OKX Web3 to combat misuse involving IP blocking in banned markets and real-time black address detection and blocking systems.”

It is mentioned in this article