THORChain's Refusal to Block Stolen Funds Raises Legal Concerns

THORChain has come under scrutiny for its handling of stolen funds after North Korean hackers exploited crypto exchange Bitget for $387.5 million.

Bitget CEO Gracy Chen asked THORChain to block the recipient addresses, but the decentralized cross-chain swaps platform refused, citing its permissionless nature and lack of control over assets.

This is not the first time THORChain has been involved in a controversy surrounding stolen funds. In May, it was used to swap around $1.2 billion of the funds stolen in the $1.46 billion hack of Bybit, despite its admin key being retired just 11 days earlier.

Yuriy Brisov from D&A Partners weighed in on the legal implications of THORChain's actions, stating that while refusing to block addresses may be a defense, it also opens up the protocol to potential claims of recklessness or negligence if it doesn't take steps to prevent illicit activities.