Decentralized Protocols Face Off Over Stolen Funds: THORChain vs NEAR

A recent hack on Bitget has led to a heated debate over how decentralized protocols should handle stolen funds. On September 24, hackers stole $387.5 million from Bitget and quickly moved the funds across various chains. THORChain, a decentralized cross-chain swaps platform, was one of the targets.

Bitget's CEO, Gracy Chen, publicly appealed to THORChain to refuse service to attacker-linked addresses, stating 'The industry is watching.'

However, THORChain refused, citing its commitment to permissionlessness. Boone Wheeler, a developer at THORChain, argued that if the platform were to block specific stolen funds, it would no longer be permissionless.

In contrast, NEAR Intents, a cross-chain transaction competitor of THORChain, took a different approach. It intervened to block hack-linked funds and identified more than $50 million in attempted flows linked to the Bitget incident. Although NEAR Intents was able to stop some of the funds, it acknowledged that $166,000 had still passed through.

The debate highlights the tension between permissionlessness and the need for protocols to take action against illicit activities. Chen emphasized that while different protocols have varying architectures and governance models, there is a distinction between permissionless infrastructure and facilitating the movement of known stolen funds.