THORChain Co-Founder Proposes Refunding Bitget Hack Fees to Exchange
THORChain co-founder Chad Barraford has announced plans to discuss refunding part of the developer fund's earnings from the Bitget hack to the affected exchange. Speaking on the Unchained podcast, Barraford stated he would raise the idea with THORChain’s Treasury, suggesting that a portion of the fund's income could be returned to Bitget. He emphasized that the developer fund’s share of the fees is about 5%, describing it as a 'very small sliver' of the total income.
The conversation came after attackers stole $387.5 million from Bitget on September 24, with stolen funds being routed through THORChain. THORChain had previously rejected Bitget's request to block the attacker’s wallets, citing its policy of not censoring transactions by design. Bitget has since covered the losses using its Protection Fund.
Researcher Andrey Sergeenkov analyzed the laundering swaps, revealing that $573,226 in THORChain liquidity fees were paid through October 2, accounting for 75.3% of the total protocol and service fees tracked. Security expert Taylor Monahan, who co-hosts Unchained’s Uneasy Money podcast, argued that THORChain profits heavily from stolen funds, making it less likely to act against such activities. Barraford countered that illicit income is 'barely a blip' over the protocol's full history.
Barraford also noted that node operators who object to the earnings from stolen funds can choose to return their own rewards to Bitget. He maintained that THORChain cannot block individual swaps quickly due to the time required for validators to reach a consensus. Monahan argued that THORChain has acted swiftly in the past when it chose to, such as decisions on its ThorFi lending feature and its own hack. Barraford replied that consensus allows for changes but noted that other protocols like Bitcoin and Ethereum also choose not to act in such cases.
Regarding legal exposure, Barraford mentioned that U.S. government agencies contacted him in 2022 or 2023 to understand how THORChain works, describing the conversations as 'not adversarial'.