FTX hacked for continuous coin redemption and money laundering, THORSwap announces entry into maintenance mode

The cross-chain liquidity protocol THORChain's trading aggregator THORSwap has announced that it is entering maintenance mode due to the influx of illegal funds. The so-called illegal funds refer to the flow of funds from the FTX hacker, who has been actively exchanging coins and laundering money on the chain over the past week.

THORSwap: Eliminating All Criminal Activities

THORSwap announcement stated that due to a series of illegal fund flows potentially passing through THORChain, especially THORSwap, a decision has been made to temporarily put THORSwap into maintenance mode after consultation with legal counsel and law enforcement agencies.

THORSwap will remain in maintenance mode until they can implement a more robust solution, claiming it is to combat any potential illicit activities, with no further information currently available to share with users.

Fellow THORChads,

A pressing and persistent concern has recently come to light: the potential movement of illicit funds through THORChain and, specifically, THORSwap. Such activities have no place on the THORSwap platform, and THORSwap stands firmly against any and all criminal…

— THORSwap ⚡ #BetterThanCEX (@THORSwap) October 6, 2023

Although trading on THORSwap has been suspended, lending, staking, and other services are still operating as usual.

According to the THORChain Explorer, THORChain has seen a significant increase in trading volume this month, reaching a historic high of $355 million on October 5th.

Analyst Ember noted that after the halt of THORSwap, the FTX hacker was forced to switch to Threshold Network for asset exchange.

FTX Hacker Transferring Cryptocurrency Multiple Times

According to on-chain analytics firm Lookonchain, the FTX hacker has transferred approximately 22,500 ETH worth around $38 million this week and exchanged the assets for BTC through THORChain.

Consensys product manager Taylor Monahan also pointed out that hackers from North Korea and Russia have been laundering money through THORChain, with over 50% of ETH→BTC conversions in the past four months being conducted through THORSwap.

Little Information on "FTX Hacker"

Following FTX's bankruptcy filing, reports emerged of either hackers or internal theft of funds, which newly appointed CEO John Ray confirmed. The U.S. Department of Justice has initiated an investigation, but no further relevant information has been released on the matter.

Blockchain detective ZachXBT: The FTX hacker is real, don't confuse it with the Bahamian government!