THORChain saw a record-breaking $1 billion swap volume in just two days.
The surge follows Bybit's $1.5 billion hack on February 21, leading users to decentralized alternatives.
The protocol has been accused of enabling money laundering, with North Korea’s Lazarus Group allegedly using it to swap stolen funds.
In the wake of a massive security breach at cryptocurrency exchange Bybit, users are rapidly shifting to decentralized platforms to safeguard their assets. THORChain, a cross-chain swap protocol, has emerged as a prominent beneficiary of this migration, witnessing unprecedented activity levels.
On February 26, THORChain processed an astounding $859.61 million in swaps, setting a new daily volume record. The momentum continued into February 27, with an additional $210 million in transactions, bringing the two-day total to over $1 billion. This surge directly follows Bybit’s $1.5 billion hack on February 21, which has prompted users to seek decentralized alternatives like THORChain to manage their funds securely.
Controversy Surrounding THORChain’s Role in Illicit Activities
Despite its growing popularity, THORChain has faced criticism for allegedly facilitating the laundering of stolen funds.
Notably, the North Korean state-sponsored hacking group, Lazarus, has been known to exploit platforms like THORChain to convert illicitly obtained digital assets into Bitcoin BTC$82 22224h volatility:0.5%Market cap:$1.63 TVol. 24h:$14.75 B
, thereby obscuring their origins.
In response to these allegations, THORChain’s development team has implemented measures to assist wallet and integration partners in screening for illicit activities. Engineer “Pluto” from Nine Realms, a core developer for THORChain, acknowledged the presence of illicit funds on the platform but emphasized the team’s commitment to enhancing security and compliance protocols.
When we first started seeing illicit flows on THORChain, our team bridged the gap for wallets and integration partners, helping them integrate screening services like @elliptic. I am pleased to that @SwapKitPowered and @RangoExchange offer this solution to their partners. Any… https://t.co/3yHifg925m
In a proactive move to curb unauthorized transactions, THORChain temporarily paused Bitcoin and Ethereum lending services in January after accumulating approximately $200 million in liabilities. This decision was part of a broader debt restructuring plan aimed at stabilizing the platform’s financial standing.
However, while lending services were halted, swap functionalities remained active, allowing users to continue trading assets across different blockchains.
Platforms Exploited for Laundering Stolen Funds
Despite the restrictions, hackers have used other platforms to launder their illicit proceeds. For example, the hackers behind the Bybit attack have been actively moving the stolen funds, with reports indicating that a significant portion has been laundered through decentralized platforms like THORChain.
Yesterday, blockchain data revealed that the hacker has transferred 45,900 Ether ETH$1 80524h volatility:1.3%Market cap:$217.94 BVol. 24h:$10.67 B
, valued at approximately $113 million, within the last 24 hours. This brings the total amount laundered to over 135,000 ETH, worth around $335 million.
According to pseudonymous blockchain analyst EmberCN, the hacker still holds roughly 363,900 ETH, estimated to be worth $900 million.
As of February 27, investigators have traced substantial amounts of the stolen assets being converted into Bitcoin and dispersed across numerous blockchain addresses. This method mirrors previous tactics employed by the Lazarus Group, which often utilizes decentralized exchanges and crypto mixers, such as Tornado Cash, to obfuscate the origin of illicit funds.
The Federal Bureau of Investigation (FBI) has sought assistance from the crypto industry to track and block transactions related to the Bybit hack. They have published a list of Ethereum addresses associated with the stolen funds, urging platforms and users to remain vigilant and report any suspicious activities.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.