OKX Suspends Decentralized Exchange Operations After Consulting With Regulators To Combat Financial Crime

The crypto exchange OKX has decided to “temporarily suspend” its decentralized exchange (DEX) aggregator after consulting with regulators.

Traders use data from DEX aggregators to find the best-priced trades across various decentralized exchanges.

OKX’s aggregator has recently come under scrutiny. Last month, hackers stole a staggering $1.4 billion worth of Ethereum (ETH) and Lido Staked Ether (stETH) from the crypto exchange Bybit. Pseudonymous on-chain investigator ZachXBT linked the exploit to the Lazarus Group, an infamous North Korean cybercriminal outfit.

Earlier this month, Ben Zhao, Bybit’s chief executive, said $100 million worth of the stolen ETH was moved through OKX’s web3 proxy.

“Out of them, 16,680 ETH we can trace [and] 23,553 ETH or $65 million (~5%) is untraceable, which requires info from OKX web3 wallet.”

Last week, Bloomberg, citing “people with knowledge of the matter,” reported that European Union (EU) crypto regulators were looking into OKX.

This weekend, OKX said it detected a coordinated effort by the Lazarus Group to misuse its decentralized finance (DeFi) services. In response, the exchange noted that it had made the “proactive decision” to temporarily suspend its DEX aggregator services.

“This move allows us to implement additional upgrades to prevent further misuse. We know that transparency is key, so we’re also working closely with blockchain explorers to correct incomplete labeling. Our goal is to ensure that explorers properly highlight the actual DEX processing trades rather than mistakenly identifying our aggregator as the point of trade.

Beyond that, we’ve already rolled out:

• A hacker address detection system for its Web3 DEX aggregator, which was launched a few days ago.
• A system to track the hacker’s latest addresses and block them in the CEX (centralized exchange) system in real-time…

One thing we want to make absolutely clear: OKX Web3 is a DEX aggregator, not a custodian of customer assets.”

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