Privacy-focused exchange eXch will shut down operations on May 1 following rising allegations that it was used to launder funds stolen in the $1.5 billion Bybit hack.

In an Apr. 17 notice on the Bitcoin Forum, eXch’s team said the project had become the target of a “transatlantic operation” aiming to shut it down and potentially prosecute key figures for money laundering and terrorism.

The Czech-based exchange, known for minimal know-your-customer requirements, stressed that it was created as a privacy experiment with no financial goals. It denied any intent to facilitate illicit activity.  While eXch has often been labeled a “mixer,” the team clarified that it is a privacy-focused instant exchange, not a traditional coin mixer.

The team claims it received intelligence from contacts in the “state intelligence sector” that confirmed its inclusion in ongoing investigations related to the laundering of crypto assets. 

The exchange had previously denied accusations of laundering funds from the Bybit hack, initially dismissing reports that it had aided North Korea’s Lazarus Group. However, it later acknowledged processing a “small portion” of the hacked funds.

Blockchain analytics firms like Elliptic and TRM Labs flagged eXch as a key hub in the laundering process. Following the Feb. 21 exploit that drained ~401,000 Ethereum (ETH) from Bybit’s cold wallet, the Lazarus Group used a web of decentralized exchanges, cross-chain bridges, and privacy tools, including eXch, to hide the stolen assets’ origin.

In its shutdown notice, eXch criticized centralized exchanges for what it called “nonsensical policies” that fail to meaningfully stop money laundering. It reaffirmed its mission of defending user privacy and announced a 50 Bitcoin (BTC) fund to support open-source privacy-enhancing projects in the Bitcoin and Ethereum ecosystems.

Despite its closure, eXch warned that shutting down its platform would not eliminate illicit activity in crypto. “The goal of stopping eXch under the belief that it may stop all money laundering in the world is ridiculous,” the statement reads.

eXch’s API will remain available to partners for a limited time, while an incoming management team determines the platform’s final transition. “Privacy is not a crime,” the announcement concludes.