German law enforcement has made a major breakthrough in the fight against crypto-related financial crimes with the confiscation of $38 million in digital assets from eXch, a cryptocurrency swapping platform allegedly used to launder funds stolen in the devastating Bybit hack.
The Bybit hack saw $1.4 billion stolen in February 2025. The seizure, announced by Germany’s Federal Criminal Police Office (BKA), is the country’s third-largest crypto confiscation and further highlights the growing crackdown on illicit crypto activities.
eXch: a hub for laundering Bybit hack funds
The infamous Bybit hack of February 2025, which siphoned $1.4 billion from the exchange, shook the crypto industry. Blockchain forensic investigators quickly uncovered that eXch, a pseudo-anonymous crypto swapping service, played a major role in laundering a significant portion of the stolen funds. Operating without proper Anti-Money Laundering (AML) protocols since 2014, eXch became a preferred laundering tool for cybercriminals due to its ability to obscure transaction trails.
German law enforcement’s raid on eXch uncovered Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Dash (DASH). It also unraveled a treasure trove of incriminating data: over eight terabytes of server records. Analysis revealed the platform had processed a staggering $1.9 billion in crypto transactions, with forensic evidence directly linking multiple transactions to the Bybit hack proceeds. The takedown exposed how such unregulated platforms have become critical infrastructure for laundering funds from major crypto heists.
How eXch facilitated the Bybit hack laundering
According to blockchain analytics firm TRM Labs, eXch played a crucial role in obfuscating the stolen funds from the Bybit hack. The platform allowed users to swap between cryptocurrencies, making it difficult for investigators to trace the assets.
Crypto investigator ZachXBT revealed that eXch was also involved in laundering funds from other high-profile hacks, including:
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The $243 million Genesis creditor theft
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Multisig and FixedFloat exploits
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Numerous phishing scams
ZachXBT noted that eXch repeatedly ignored freeze requests, enabling cybercriminals to move stolen assets freely.
Germany’s aggressive stance on crypto crime
Analysts say the seizure shows Germany’s commitment to combating crypto-related financial crimes. Senior public prosecutor Benjamin Krause emphasized the dangers of unregulated swapping services like eXch, calling them “essential components of the underground economy.”
This is not the first time German authorities have made headlines for large-scale crypto seizures. In 2021, they confiscated over $2 billion in Bitcoin linked to the defunct movie piracy site Movie2k. The latest Bybit hack confiscation further solidifies Germany’s reputation as a leader in crypto crime enforcement.
eXch shuts down amid mounting pressure
Facing intense scrutiny, eXch announced its shutdown in mid-April via a Bitcoin Talk post. The platform cited a “hostile environment” where it was targeted by intelligence agencies.
Despite initial denials of involvement in the Bybit hack, eXch’s closure and subsequent seizure confirm its role in laundering stolen funds. The platform’s operators claimed they were misunderstood, but authorities remained unconvinced.
What this means for the future of crypto security
The Bybit hack and subsequent seizures highlight the ongoing vulnerabilities in crypto security. While exchanges like Bybit have strengthened their defenses, laundering services like eXch continue to pose risks by enabling cybercriminals to cash out stolen assets.
Regulators worldwide are stepping up efforts to enforce stricter AML measures in the crypto space. Germany’s latest action sends a clear message: anonymous swapping services will not escape scrutiny.
Lessons from the Bybit hack and eXch seizure
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Third-largest crypto seizure in Germany – The $38 million confiscation ranks among the country’s biggest enforcement actions.
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eXch’s role in laundering Bybit hack funds – The platform processed millions in stolen crypto before being shut down.
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Germany’s crackdown on illicit crypto activities – Authorities are taking aggressive steps to dismantle money laundering networks.
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Ongoing security challenges in crypto – Despite advancements, hackers and laundering platforms remain persistent threats.
The Bybit hack saga is far from over, but Germany’s decisive action against eXch marks a significant win in the fight against crypto crime. As investigations continue, more revelations about the laundering network may emerge, further shaping global crypto regulations.
