Debate Rages Over Blocking Stolen Funds on Decentralized Protocols

A recent hack on Bitget has reignited an ongoing debate in the crypto community regarding whether decentralized protocols should block stolen funds. The $387.5 million hack saw some of the stolen funds move towards THORChain, a decentralized cross-chain swap platform.

THORChain's decision not to block services for addresses linked to the hack has been criticized by Bitget CEO Gracy Chen, who warned that 'the industry is watching.'

Critics argue that permissionless infrastructure should be able to stop known illicit flows, but THORChain developers say this would effectively make it permissioned.

NEAR Intents, a cross-chain transaction competitor, has taken a different approach with an automated security layer (SHIELD) that identifies and blocks some hack-linked flows. NEAR's team argues that permissionlessness can coexist with targeted controls.