After a six-day halt, THORSwap, a decentralized exchange, is back in action. The platform had detected suspicious funds and decided to pause its services to address the issue.
On October 6, THORSwap stopped its services due to concerns about the movement of illicit funds. The platform recognized the misuse and aimed to find a lasting solution. By October 12, they announced their return to normal operations on X (previously known as Twitter). Users can now continue swapping over 5,500 assets across 10 blockchains.
Important public notice. Please update this for your subscribers @coinbureau 🙏
— THORSwap ⚡ #BetterThanCEX (@THORSwap) October 13, 2023
New Terms of Service
THORSwap introduced a new terms of service on October 11. These terms require users to follow laws like Anti-Money Laundering. They must not engage in illegal financial activities. If users break these rules, THORSwap can stop their access without any warning.
Many in the crypto community were upset by these changes. They felt that the platform was acting more like a centralized exchange. One user even questioned if THORSwap had copied the terms from a regular CEX.
Clarifying Centralization Concerns
Erik Voorhees, the founder of ShapeShift, explained that THORSwap and THORChain are different. While THORSwap made decisions about its interface as a centralized company, THORChain remains decentralized.
THORSwap has partnered with an industry leader to add more protections against the flow of illicit funds. They might make more adjustments in the coming days. On the same day of THORSwap’s return, Elliptic, a blockchain analytics firm, reported about a hacker from the defunct crypto exchange FTX. This hacker began moving stolen funds in September 2023.
Elliptic revealed that this anonymous hacker used THORSwap to change 72,500 Ether (worth about $120,000 million) into Bitcoin. After this, the crypto was sent to cryptocurrency mixers like Sinbad. THORSwap stated that once the cryptocurrencies go through a mixer, tracing them becomes impossible.
THORSwap’s Token and Sanctions
After resuming its services, THORSwap’s native token, THOR, saw a 10% rise in 24 hours. The new terms of service now exclude countries sanctioned by the U.S., UK, and Europe. This list includes countries like North Korea, Myanmar, and Iran.
FTX Exploiter’s Movements
A wallet labeled “FTX Exploiter” had been moving funds to various addresses, including THORSwap. This wallet contained part of the $600 million stolen from the FTX exchange in 2022. The FTX hacker changed their strategy after THORSwap suspended its service. They started using the Threshold Network to launder their stolen Ethereum into Bitcoin.
The FTX hack’s aftermath continues to ripple through the crypto world. THORSwap’s recent actions and updates reflect the challenges platforms face in ensuring security and legality. The identity of the FTX hack’s mastermind remains a mystery, with some suspecting FTX founder Sam Bankman-Fried, who is currently on trial. However, he has strongly denied these allegations.