{"id":16494,"date":"2025-03-06T14:17:11","date_gmt":"2025-03-06T14:17:11","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=16494"},"modified":"2025-03-06T14:17:11","modified_gmt":"2025-03-06T14:17:11","slug":"will-this-proposal-block-crypto-laundering-on-thorchain-after-bybit-hack","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=16494","title":{"rendered":"Will This Proposal Block Crypto Laundering On THORChain After Bybit Hack?"},"content":{"rendered":"<div>\n<p><span data-preserver-spaces=\"true\">In 2024, rug pulls and DeFi exploits dominated headlines. No major centralized exchange (CEX) hack resulted in billions lost, a trend the crypto community was beginning to associate with improved security\u2014until North Korean hackers struck in February 2025, stealing 500,000 ETH worth over $1.4 billion from Bybit. After the Bybit hack, a big portion of the stolen funds was laundered, mostly through decentralized platforms, with THORChain emerging as the hackers\u2019 favorite.<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">EXPLORE:\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/new-cryptocurrency\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Best New Cryptocurrencies to Invest in 2025<\/span><\/a><\/strong><\/p>\n<h2><span data-preserver-spaces=\"true\">The Bybit Hack and How THORChain Was Misused<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The heist is easily one of the largest in crypto history, and the community hopes it will be the last of this magnitude. Although Bybit continues to operate normally, allowing withdrawals as usual, fears are growing that centralized exchanges may not be as robust as they appear. This perception persists despite the hundreds of millions\u2014if not billions\u2014of dollars spent to reinforce the ecosystem and protect user funds while fostering a supportive environment for some of the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/best-meme-coin-icos\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">best meme coins<\/span><\/a><span data-preserver-spaces=\"true\"> to invest in 2025 to boom.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u00a0THORChain \u2013 the community-driven, multi-chain protocol enables users to instantly and cheaply convert tokens. <\/span><span data-preserver-spaces=\"true\">Among its many options,<\/span><span data-preserver-spaces=\"true\"> users can swap ETH for Bitcoin (BTC)\u2014precisely what happened with the Bybit stash.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Hackers used THORChain to launder nearly 80% of the stolen funds, converting them to Bitcoin in roughly 10 days. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> could <\/span><span data-preserver-spaces=\"true\">prove to<\/span><span data-preserver-spaces=\"true\"> be a reputational blow for the decentralized exchange (DEX), coming at the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/99bitcoins.com\/news\/thorchain-at-crossroads-a-chess-move-or-rune-death-spiral\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">worst<\/span><\/a><span data-preserver-spaces=\"true\"> possible time.<\/span><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">3.4.25 Executive Summary on Hacked Funds: <br \/>Total hacked funds of USD 1.4bn around 500k ETH, 77% are still traceable, 20% has gone dark, 3% have been frozen. <br \/>Breakdown: <br \/>\u2013 83%  (417,348 ETH, ~$1B) have been converted into BTC with 6,954 wallets (Average 1.71 btc each) . This and\u2026<\/p>\n<p>\u2014 Ben Zhou (@benbybit) <a href=\"https:\/\/twitter.com\/benbybit\/status\/1896798476945744010?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"nofollow\">March 4, 2025<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<h2><span data-preserver-spaces=\"true\">Will This Proposal Be A Solution?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Aware of the implications, one developer is proposing a fix. In a <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/x.com\/jpthor\/status\/1895660525511643484\" target=\"_blank\" rel=\"noopener nofollow\"><span data-preserver-spaces=\"true\">post<\/span><\/a><span data-preserver-spaces=\"true\"> on X, they noted that <\/span><span data-preserver-spaces=\"true\">a pull request had been submitted<\/span><span data-preserver-spaces=\"true\"> to address this issue. The goal is to, in the future, prevent hackers, scammers, and other bad actors from misusing THORChain.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The proposed solution allows node operators to block specific wallet addresses. Under this mechanism, each node operator processing swaps and transfers on THORChain would manually maintain a list of <\/span><span data-preserver-spaces=\"true\">blacklisted<\/span><span data-preserver-spaces=\"true\"> addresses on their servers. For U.S.-based node operators, aligning this list with OFAC- or FBI-sanctioned addresses would ensure compliance with existing laws and restrictions.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Once implemented, only active nodes could determine whether to trace transactions from a given address. For security, nodes filtering transactions from <\/span><span data-preserver-spaces=\"true\">blacklisted<\/span><span data-preserver-spaces=\"true\"> addresses would do so privately. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Crucially, only the node operator\u2014or an agency with a subpoena\u2014would know about the <\/span><span data-preserver-spaces=\"true\">blacklisting<\/span><span data-preserver-spaces=\"true\">. Nodes refusing to honor transactions approved by others would face slashing.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">As for the funds laundered from the Bybit hack, little can be done\u2014at least for now\u2014since hundreds of millions of dollars worth of ETH remains unrecovered. The pull request aims to mitigate future risks, preventing THORChain from once again enabling money laundering on an unprecedented scale.<\/span><\/p>\n<p><strong>Discover: <a href=\"https:\/\/99bitcoins.com\/cryptocurrency\/crypto-presales\/\">The 12+ Hottest Crypto Presales to Buy Right Now\u00a0<\/a><\/strong><\/p>\n<h2><span data-preserver-spaces=\"true\">Arising Concerns<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">While this proposal <\/span><span data-preserver-spaces=\"true\">is welcomed<\/span><span data-preserver-spaces=\"true\">, concerns persist about its feasibility. Critics question how node operators will effectively block <\/span><span data-preserver-spaces=\"true\">blacklisted<\/span><span data-preserver-spaces=\"true\"> addresses from transactions. At the same time, there are concerns whether this approach makes sense. Hackers can generate millions of new addresses if needed.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">From a technical perspective, another critic <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/x.com\/WeiDai6502\/status\/1895708878480031845\" target=\"_blank\" rel=\"noopener nofollow\"><span data-preserver-spaces=\"true\">argues<\/span><\/a><span data-preserver-spaces=\"true\"> that the proposal won\u2019t enhance transparency. There\u2019s no consensus mechanism requiring 34 nodes to agree on blocking an address. Instead, the list of <\/span><span data-preserver-spaces=\"true\">blacklisted<\/span><span data-preserver-spaces=\"true\"> addresses is stored locally on servers, making it difficult to track or verify its use across the network. Others contend that THORChain, as a decentralized protocol, risks compromising its core principles by blocking addresses.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Whether this proposal gains traction and <\/span><span data-preserver-spaces=\"true\">is implemented<\/span><span data-preserver-spaces=\"true\"> remains uncertain. What\u2019s clear is that THORChain is taking a reputational hit following the Bybit hack. This could potentially draw scrutiny from law enforcement investigating transactions and enabling nodes. If that happens, RUNE could extend losses <\/span><span data-preserver-spaces=\"true\">from February 2025, further falling away from the <a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/new-cryptocurrency\/\" target=\"_blank\" rel=\"noopener\">best cryptocurrencies to invest in 2025<\/a>.<\/span><\/p>\n<ul class=\"nnbtc-key-takeaways__list\">\n<li class=\"nnbtc-key-takeaways__list-item\">\n         Bybit lost over $1.4 billion worth of ETH after hack     <\/li>\n<li class=\"nnbtc-key-takeaways__list-item\">\n         A big chunk of ETH converted to BTC on THORChain as hackers laundered funds     <\/li>\n<li class=\"nnbtc-key-takeaways__list-item\">\n         Developer wants to block this from happening in the future     <\/li>\n<\/ul>\n<p>[\/key_takeaways]<\/p>\n<p>The post <a href=\"https:\/\/99bitcoins.com\/news\/will-this-proposal-block-crypto-laundering-on-thorchain-after-bybit-hack\/\">Will This Proposal Block Crypto Laundering On THORChain After Bybit Hack?<\/a> appeared first on <a href=\"https:\/\/99bitcoins.com\/\">99Bitcoins<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In 2024, rug pulls and DeFi exploits dominated headlines. No major centralized exchange (CEX) hack resulted in billions lost, a trend the crypto community was beginning to associate with improved security\u2014until North Korean hackers struck in February 2025, stealing 500,000 ETH worth over $1.4 billion from Bybit. After the Bybit hack, a big portion of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-16494","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/16494","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16494"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/16494\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}