OKX Suspends Web3 DEX Aggregator Amid EU Scrutiny Over Bybit Hack

OKX has temporarily halted its Web3 decentralized exchange (DEX) aggregator following discussions with European regulators, citing efforts to bolster security and prevent platform misuse.

EU Investigation Links OKX to Bybit Hack

The suspension comes as European regulators investigate whether North Korean hackers tied to the Lazarus Group funneled funds through OKX Web3 after the recent Bybit breach. According to a Bloomberg report, officials from all 27 EU nations discussed the matter in a March 6 European Securities and Markets Authority (ESMA) meeting.

Bybit’s CEO, Ben Zhou, confirmed that hackers used OKX Web3 to launder around $100 million of the $1.5 billion stolen in the attack. In response, regulators are now evaluating whether OKX’s aggregator falls under the EU’s Markets in Crypto-Assets (MiCA) framework and what penalties, if any, may apply.

OKX Defends Its Position

OKX maintains that any alleged involvement in illicit fund transfers stems from mislabeling by blockchain explorers and other decentralized platforms. The company is collaborating with these explorers to correct inaccuracies and ensure proper transaction reporting.

“We’re working closely with blockchain explorers to improve labeling accuracy,” OKX stated. “Our goal is to ensure that explorers identify the actual DEX handling trades rather than mistakenly attributing transactions to our aggregator.”

The exchange also emphasized that its aggregator does not hold user assets but merely connects traders to liquidity across various decentralized protocols.

Strengthening Security Measures

In response to regulatory concerns, OKX has implemented new security measures, including a real-time detection system designed to identify and block hacker-associated addresses from accessing its centralized exchange.

OKX CEO Star Xu highlighted these efforts, stating:

“We’ve rolled out extensive controls for OKX Web3, including IP blocking for restricted markets and real-time detection to prevent illicit activity.”

As European regulators continue their review, OKX’s next steps could be critical in determining its compliance with evolving crypto regulations.