Report: European watchdogs investigating OKX’s Web3 service over Bybit heist

European regulators are reportedly investigating crypto exchange OKX after hackers allegedly used it to launder proceeds from a nearly $1.5 billion heist on Bybit.

Cryptocurrency exchange OKX is under investigation by European regulators after hackers allegedly used its platform to launder proceeds from a $1.46 billion heist on Bybit, Bloomberg has learned, citing sources familiar with the matter.

The inquiry, led by national watchdogs from the European Union’s 27 member states, was discussed at a meeting of the European Securities and Markets Authority’s Digital Finance Standing Committee on March 6, the sources claim.

The focus is on OKX’s Web3 service, which is a decentralized finance platform and self-custodial wallet. It’s alleged that North Korea-backed hackers laundered about $100 million through the service. European regulators are now investigating whether OKX’s Web3 platform falls under the EU’s new Markets in Crypto-Assets regulations, which took effect at the end of 2024.

While OKX claims that its Web3 platform is decentralized, regulators from Austria and Croatia argue that it should be governed by MiCA due to its integration with OKX, the report states.

OKX risks losing MiCA authorization

In a statement to Bloomberg, a spokesperson for OKX denied any wrongdoing, saying that claims of OKX’s involvement in laundering funds “are inaccurate and preposterous.”

In late February, North Korean hackers targeted Bybit, one of the largest cryptocurrency exchanges, stealing around $1.46 billion worth of crypto in a highly sophisticated heist. The attack was reportedly carried out by compromising the computer of an employee at Safe, Bybit’s technology provider. Less than two weeks after the breach, Bybit’s CEO Ben Zhou stated that around 20% of the stolen funds had become untraceable, due to the hackers’ use of mixing services.

The current stage of the investigation remains unclear, but it could lead to regulatory actions, including the potential revocation of OKX’s MiCA authorization in Europe, Bloomberg reports. Under MiCA’s Article 64, regulators can withdraw a license if the entity fails to implement effective systems to prevent money laundering or violates other significant regulations.