European Union regulators are reportedly looking into a service offered by crypto exchange OKX that may have played a role in the laundering of $100 million in funds from the Bybit hack, according to Bloomberg.

A March 11 Bloomberg report citing people familiar with the matter claims that national watchdogs from the EU’s member states discussed the issue during a March 6 meeting hosted by the European Securities and Markets Authority’s Digital Finance Standing Committee. The issue appears to be OKX’s decentralized finance platform and wallet service.

On Jan. 27, OKX announced that it had secured a full Markets in Crypto-Assets (MiCA) license to operate across all EU member states under a unified regulatory framework. The question for EU regulators is whether two OKX services fall under the MiCA framework and, if so, whether the exchange could be penalized.

According to Bybit CEO Ben Zhou, nearly $100 million, or 40,233 Ether (ETH), from the $1.5 billion hack had been laundered through OKX’s Web3 proxy, with a portion of the funds now untraceable.

OKX’s wallet service has reached 53 million addresses and is able to connect to 100 blockchains. Fully decentralized platforms may be exempt from MiCA regulation, but according to the Bloomberg report, regulators from at least Austria and Croatia said OKX’s Web3 service should fall under EU rules.

Related: Bybit hacker launders 100% of stolen $1.4B crypto in 10 days

OKX denies EU investigation

In a statement posted to X, OKX refuted the claim there were any ongoing investigations by the EU, adding that “Bybit’s statements are spreading misinformation” and defending its Web3 wallet services.

Source: OKX

Haider Rafique, OKX Global’s chief marketing officer, added his own take: “We spoke to Bloomberg today and provided our statement refuting some of the alleged claims. It is preposterous to suggest that WE as a company would be involved in laundering stolen funds.”

The theft of $1.5 billion in ETH and ETH-related tokens from Bybit is the largest crypto hack to date. Crypto investigators have said that the Lazarus Group, a North Korean hacking ring, was responsible for the attack. According to Zhou, who declared war on the Lazarus Group after the hack, 3% of the stolen funds have been frozen, while 20% have gone dark.

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