THORchain-powered decentralized change (DEX) THORswap paused its utilization after the persistent “movement of illicit funds” illicit funds by way of the platform.
In an Oct. 6 statement on X (previously Twitter), the protocol determined to “temporarily transition the THORSwap interface into maintenance mode” after intensive “consultation with advisors, legal counsel, and law enforcement.”
THORSwap stated the transfer was made to “swiftly curtail any further potential illicit activity” and expressed sturdy opposition to utilizing its platform for any felony actions. It added:
“THORSwap will remain in this mode until a more permanent and robust solution can be implemented to ensure the platform’s continued security and integrity.”
Over 50% of funds moved by way of THORSwap are stolen
Cryptocurrency researcher Tayvano reported that greater than 50% of the Ethereum moved by way of the THORSwap router over the last 4 months had been stolen funds.
The researcher estimated that 34,583 ETH, roughly $57 million, of “clearly stolen funds, were swapped into Bitcoin via THORSwap. They also added that at least another 3,300 ETH has been laundered through the platform.
Due to this development, THORSwap’s users will be unable to use the platform’s Swaps feature. However, they can still borrow and stake their asset via the protocol.
Meanwhile, THORChain said THORSwap’s decision does not affect its operations, as its network remains fully operational and capable of supporting a variety of interfaces.
“THORChain, the network, is fully operational and can handle many different interfaces built on top of it. Interfaces include, Shapeshift, Rango, Trust Wallet, Ledger, XDefi, Asgardex, Edge wallet and more.”
THORChain stated THORSwap solely “caters to users, presents data, and quotes their swap requests,” including that customers are nonetheless tasked with constructing a swap and submitting the transaction instantly to ETH/BTC nodes.
“The transaction is confirmed on respective L1 networks, and THORChain nodes react to these tx’s in an atomic and immutable way. No THORChain node can unilaterally affect a transaction; 16/20 work together to sign transactions. If a group fail to do a transaction, they are slashed and the swap is re-delegated to a different vault. This ensures tx execution guarantees.”