THORChain, the decentralized cross-chain exchange, has seen an unprecedented surge in trading volume, hitting a record $4.6 billion in swaps following the $1.4 billion hack of Bybit. This spike in activity is directly linked to hackers attempting to launder stolen funds through THORChain’s decentralized infrastructure, raising concerns about how DeFi platforms can be exploited for illicit financial activities.
The Bybit hack, which has been identified as one of the largest cryptocurrency exchange breaches in history, saw attackers drain over $1.4 billion in Ethereum (ETH). According to reports, U.S. authorities, including the FBI, have attributed the attack to North Korea’s Lazarus Group, a cybercriminal syndicate notorious for high-profile financial heists. Investigations suggest the hackers exploited vulnerabilities in Bybit’s cold wallet security during a routine transfer, allowing them to siphon funds undetected.
THORChain’s Record-Breaking Volume
The hackers behind the $1.4 billion Bybit exploit successfully laundered their entire Ethereum holdings in just 10 days, utilizing a network of intermediary wallets and decentralized exchanges to obscure their tracks. According to on-chain analytics firm Nansen, the stolen funds were systematically moved across multiple wallets, with each transaction breaking the amount into smaller transfers to complicate tracking efforts.
The laundering operation reached major third-party entities within two transaction “hops” from the original exploit wallet. Among the platforms most frequently used for the laundering process were THORChain, Paraswap, Mantle, OK DEX, and DODO, according to Nansen’s report highlighted by CoinDesk.
As the stolen funds began moving across the blockchain, analysts noted a dramatic increase in transactions on THORChain, with hackers reportedly leveraging the protocol’s cross-chain functionality to obscure the origins of the stolen assets. THORChain’s ability to facilitate direct swaps between assets across different blockchains without intermediaries made it a prime tool for laundering illicit funds, significantly boosting the protocol’s trading volume. The protocol processed $4.66 billion in swap volume last week, the highest tally on record for weekly volume, according to data source DefiLlama. In a single day on 2nd March, THORChain processed over $1 billion in transactions, the highest on record for daily transaction volume.
As the hackers moved 499,000 ETH ($1.39 billion) through DeFi protocols and liquidity pools, the mass liquidation of stolen assets directly impacted Ethereum’s price, contributing to a 23% drop from $2,780 to $2,130 over the laundering period.
As the revelation of THORChains role in the laundering of the stolen funds emerged, Defi users reacted in passionate forms, with many emphasizing that THORChain should have done something to curtail the laundering, despite its decentralized stand. NFT Critic, @Alonmust said on X:
“Thorchain sold the future of crypto industry and security of the whole world for $5.5M.”
Quick Facts
- THORChain processed a record $4.6 billion in swaps following the Bybit hack, with over $1 billion in transactions recorded in a single day.
- Hackers leveraged THORChain’s cross-chain functionality to launder stolen funds.
- The FBI attributed the attack to North Korea’s Lazarus Group, a cybercriminal organization known for targeting financial institutions.
