THORChain under fire over Bitget, ETH evolves beyond blockchain: Hodler’s Digest

ThorChain under fire because it won’t blacklist stolen Bitget funds

Stop me if you’ve heard this before: A centralized exchange with lax security gets hacked by the North Koreans for $387.5 million, and then somehow shifts the blame game onto a decentralized exchange for not blacklisting the addresses.

The drama began on September 25 when the Asian focused exchange Bitget revealed $351.6 million in “unauthorized transfers” but it later upgraded the tally to $387.5 million. It said a preliminary investigation had linked the IP addressees to VPN services used by a North Korean hacking group.

While that isn’t firm proof, CEO Gracy Chen said its investigators had flagged other similarities with previous thefts.

North Korean hackers were believed to be behind the $1.5 billion Bybit exchange hack, and much of the funds from that attack were then swapped on the decentralized exchange THORChain (which is not a mixer and funds can still be traced after being swapped).

Chen then publicly called on THORChain to block the addresses linked to the attack. “Decentralization is a design principle, not a shield for facilitating known stolen funds,” she thundered. Thorchain politely said no dice, which has set off a massive debate over whether they can or should comply with Chen’s request.

Decentralization maxis like Joel Valenzuela said doing so would undermine crypto’s cypherpunk ethos.