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German authorities announced that they confiscated over $38 million worth of bitcoin and other cryptocurrencies from eXch exchange a day before its closure.
Authorities said operators are suspected of running a criminal trading platform.
The exchange previously said their privacy-focused goals were being misinterpreted.

German authorities have seized 34 million euros ($38.2 million) worth of crypto assets from the now-defunct crypto swapping platform eXch, the Frankfurt Prosecutor General's Office announced Friday.

The cryptocurrency swapping service, which started in 2014, facilitated anonymous exchanges of crypto assets, operating without anti-money laundering protocols or know-your-customer measures.

On April 30, authorities seized a variety of crypto assets, including Bitcoin, Ether, Litecoin, and Dash. They also confiscated over 8 terabytes of data and the associated server infrastructure in Germany.

German prosecutors said eXch explicitly advertised its lack of anti-money laundering measures on platforms of "criminal underground economy."

Authorities estimate around $1.9 billion in crypto have been moved through eXch since its inception, part of which came from criminal origins. The statement also noted that a portion of the $1.4 billion in crypto stolen from Bybit, attributed to the North Korean hacker group Lazarus, was laundered through eXch.

"The operators of eXch are therefore suspected of commercial money laundering and the operation of a criminal trading platform on the Internet," the authorities said in a translated version of the statement.

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While eXch announced mid-April that it would shut down on May 1, the German authorities said they anticipated the move and secured evidence before the closure, despite the short notice.

In its April announcement, eXch said there was a "transatlantic operation" to close down its operations and prosecute the team for money laundering and terrorism-related charges.

The platform's operators also lamented that their privacy-centered goals were being misinterpreted, and AML measures placed in other exchanges were not effective.

"Any instant exchangers that screen their customer deposits using third-party APIs and appeal to nonsensical AML/KYC terms are far from preventing money laundering and terrorism," eXch said at the time. "Privacy is not a crime."