Crypto swapper eXch shows signs of life after post-Bybit shutdown

Once a go-to swapper for hackers and drainers, eXch was shut down by German police in April — but continued activity suggests the story isn’t over.

Without Know Your Customer (KYC) checks, eXch wasn’t your typical crypto exchange. It acted more like an instant swapper, allowing bad actors and cybercriminals to fly under the radar for years.

Among its clients was the Lazarus Group. The North Korean state-backed hacking unit thrust eXch into the spotlight back in February, when it used the platform to funnel some of the $1.4 billion it stole from Bybit. When Bybit traced its stolen funds to eXch, it requested assistance — but the platform refused.

This led to a fierce discussion over privacy versus security, but ultimately, eXch announced it would close its doors on April 17; on April 30, German authorities made it official.

But according to security firm TRM Labs, the platform may have continued operating in stealth mode after the takedown. Here’s the rise, fall and afterlife of alleged crypto laundromat eXch.

eXch shuts front door, keeps back door unlocked

Alongside its shutdown announcement, eXch posted a message claiming it would not facilitate criminal proceeds. The post was removed within hours, and operations quietly resumed — signs of an internal disagreement or perhaps even a calculated attempt to lower visibility, according to TRM.

CSAM-related fund flows traced to eXch. Source: TRM Labs

German authorities seized eXch’s servers and confiscated 34 million euros ($38 million) in crypto, along with more than eight terabytes of data, effectively dismantling its public-facing infrastructure.

Related: North Korean spy slips up, reveals ties in fake job interview

“Just like we saw with Garantex rebranding as Grinex, eXch didn’t fully die after the shutdown. It quietly kept servicing a handful of partners via API, which meant laundering activity continued even after the public takedown,” said Jeremiah O’Connor, co-founder and chief technology officer of security firm Trugard.

O’Connor added that it’s not unlikely for such platforms to serve loyal customers even after seizures.

EXch website visited on May 13. Source: eXch

“The people behind eXch.ch took full advantage of operating across multiple countries. The domain was registered through a UK-based provider, listed Switzerland as an admin location, hosted infrastructure in France, and had servers seized in Germany,” O’Connor said.

It’s still unclear if eXch will kill its API or come back under a new name. TRM said in the May 2 blog post that the platform’s remaining back-end access continued to provide anonymization infrastructure for threat actors.

No KYC, pooled liquidity draws illicit funds to eXch

EXch’s origins trace back to 2014, according to “Fantasy,” lead investigator at crypto insurance firm Fairside Network. In an October 2024 investigation, Fantasy identified the platform’s first public appearance as a BitcoinTalk forum account promoting automatic swaps between Bitcoin (BTC), Perfect Money and BTC-e vouchers — payment methods commonly associated with high-risk transactions.

Fantasy also traced the original Bitcoin wallet tied to eXch and found it was likely funded via BTC-e, the now-defunct crypto exchange shuttered by US authorities in 2017 for its role in laundering criminal proceeds.

Fantasy’s forensic research found that the modernized form of eXch emerged in 2022, when its Ethereum hot wallet was first funded. Not long after, it became a hub for prominent crypto drainers.

Monkey Drainer — the first known large-scale drainer-as-a-service operator — used eXch before its retirement. Other draining service providers like Pink Drainer and Inferno Drainer also passed funds through the platform, along with several major exploiters.

EXch’s modern wallets traced to accounts held at Binance and OKX. Source: Fantasy/MetaSleuth

EXch required no identity verification, allowing users to move funds with anonymity. That made it an attractive tool for cybercriminals looking to clean stolen assets.

“EXch managed to stay active for years — despite facilitating obvious illicit activity — because there’s still a big gap between what regulators ‘can’ do and how fast technology is moving,” Amit Levin, former investigator at Binance, told Cointelegraph.

“In today’s world, anyone can launch a smart contract or run a crypto service from anywhere, often without revealing who they are. And if there’s no registration, no KYC and no one to hold accountable, enforcement becomes close to impossible.”

The platform also drew confidence from threat actors by using a pooled liquidity system that blended user deposits and withdrawals, making it difficult for investigators and law enforcement to trace the flow of funds.

When eXch knew and did nothing

EXch denied laundering funds for North Korean crypto hackers, and in its shutdown notice, it framed the project as an attempt by privacy enthusiasts to “restore balance” in the industry. It criticized Anti-Money Laundering enforcement and condemned companies offering address risk scoring APIs as “parasites” profiting off government fear.

“Service providers in the crypto space are, for the most part, not decentralized; that is, they retain control over or access to customers’ assets, as demonstrated in the case of eXch,” Gal Arad Cohen, partner at S. Horowitz & Co, told Cointelegraph.

“A financial intermediary operating in the crypto sector faces risks similar to those of traditional financial service providers and should, therefore, be held to equivalent standards and regulatory requirements,” she said.

The closure of eXch is a “huge win” for crypto, according to Alex Katz, CEO of security firm Kerberus. However, Katz warned that bad actors can migrate to alternative projects, like THORChain, which received a shoutout in eXch’s unapologetic farewell manifesto.

In the Bybit hack, decentralized swap protocol THORChain was used as the main bridge to swap around 500,000 Ether (ETH) to Bitcoin.

EXch operators also used THORChain to allegedly obfuscate trails. Source: Tanuki42

EXch stated that its partners would retain access to its API for a limited time, but future operations would depend on the “new management team.” The old team recommended setting up new liquidity pools to maintain seamless functionality and said it would provide consultations.

It signed off with a defiant message: “Privacy is not a crime.”

German authorities reported that $1.9 billion in crypto flowed into eXch since its inception. Its operators are suspected of commercial money laundering and running a criminal trading platform.

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