OKX, the Seychelles-based cryptocurrency exchange subject to the EU's Markets in Crypto-Assets (MiCA) regulation, has formally denied reports that it is being investigated by European regulators for failing to block funds stolen in the Bybit hack. The denial came in response to a Bloomberg report that alleged regulators were scrutinizing OKX's custody wallet service after Bybit CEO Ben Zhou shared a breakdown of the stolen funds.
Background: Bloomberg Report Sparks Controversy
On March 4, Bybit CEO Ben Zhou published a summary of the movement of the 40,233 ETH stolen by suspected North Korean-backed hackers. According to Zhou, only 16,680 ETH could be traced through the OKX Web3 proxy, while the remaining 23,553 ETH was untraceable, requiring OKX to provide additional information. Bloomberg then reported that European regulators had focused on OKX's Web3 'proxy' and were calling on the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) to take action against OKX.
OKX Response: Proactive Blocking Measures Deployed
In a March 11 post on X, OKX stated that after the Bybit hack, it immediately blocked the stolen funds from entering its centralized exchange. The exchange also deployed a newly developed feature to detect and block hacker addresses from using its DEX or wallet services. OKX insisted that its Web3 wallet services are no different from those offered by rival exchanges and accused Bybit of spreading misinformation.
“We will continue to help Bybit strengthen the industry. But we absolutely refute the false claims by Bybit that are leading to misinformation about our role in what began as a serious security vulnerability on their exchange,” OKX said.
Regulatory Risks and Industry Impact
While OKX denies any formal investigation, the heightened scrutiny from European regulators poses potential risks under MiCA, which mandates strict compliance for exchanges operating in the EU. The incident underscores the challenges of cross-exchange fund tracing and anti-money laundering (AML) in the context of decentralized wallets. As the situation develops, industry participants are closely watching whether ESMA or EBA will issue any official actions.