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THORChain restores most swaps as analyst flags North Korea laundering risk
THORChain has switched swaps back on for most of the chains halted after an Oct.
Key takeaways
- Partial restart. THORChain re-enabled swaps on Bitcoin, Ethereum, Tron and several other chains, but BNB Smart Chain, Cosmos Hub and Solana remained halted.
- Refund bug. A one-block Ethereum reorg removed a 10 ETH deposit that had already been credited, leading to a refund against funds the vault never received and an automatic pause.
- Laundering warning. Analyst Jonty said a yes vote to re-enable chains would knowingly anticipate North Korea using THORChain to launder billions of dollars in stolen money; he said he would not vote for it.
What happened
THORChain has switched swaps back on for most of the chains halted after an Oct. 31 Ethereum reorganization, according to THORNode data read by Unchained at 3:50 p.m. ET on Nov. 3. The data showed trading returning on Bitcoin Cash, Dogecoin, Litecoin and Zcash between about 11:36 and 11:43 a.m. ET, on Bitcoin at about 12:09 p.m. ET, and on Ethereum and Tron at about 2:58 p.m. ET. BNB Smart Chain was still halted at that time, as were Cosmos Hub and Solana, which node data showed had been paused since before the reorg. Unchained said it found no announcement of the restart from THORChain by then.
Cointelegraph later reported that THORChain's network status page marked trading and transaction signing as 'OK' on 10 of its 13 listed external networks. BNB Smart Chain, Cosmos Hub and Solana continued to show warnings for both functions. Avalanche, Base and XRP had already been operating when Cointelegraph reported on the halt on Monday, the outlet said. Cointelegraph also reported that RUNE traded around $0.64, up about 15% over the previous 24 hours, according to CoinMarketCap.
The disruption began on Saturday when a one-block Ethereum reorganization removed a 10 Ether deposit that THORChain had already credited, according to the protocol's account cited by Cointelegraph. After the swap failed to meet its price limit, THORChain issued a refund against funds its vault had never received. The sender's actual deposit was also refunded, producing an extra 10 ETH payout and triggering an automatic pause. Node operators then paused trading across multiple networks while developers investigated.
He added that he 'wouldn't vote for that to happen.'
First $0.782Latest $0.635-18.8% over the period
Points are daily observations, not closing prices.
Why it matters
The partial restart restores several cross-chain swap routes, but it does not amount to a full return: three networks remained paused in the reports, and THORChain's Nov. 1 post gave no date for reopening the chains that remained halted. The episode also drew attention to how the protocol's decentralized operator set handles illicit-finance risk. Chainalysis said the halt had inadvertently delayed laundering by North Korean hackers trying to move funds from the $6.3 billion Binance hack, Cointelegraph reported. Jonty's warning framed the restart as a decision for node operators, not a single company, and THORChain said on Nov. 2 that 'there is no single developer or entity in control of THORChain.'
What the data shows
THORNode data reported by Unchained put the restarts at about 11:36-11:43 a.m. ET for Bitcoin Cash, Dogecoin, Litecoin and Zcash; about 12:09 p.m. ET for Bitcoin; and about 2:58 p.m. ET for Ethereum and Tron. At 3:50 p.m. ET, BNB Smart Chain, Cosmos Hub and Solana were still halted. Cointelegraph's count was 10 of 13 listed external networks with trading and transaction signing marked 'OK.' RUNE was around $0.64, up about 15% over 24 hours, according to CoinMarketCap data cited by Cointelegraph.
Background
THORChain's official account posted on Nov. 1 that 'nodes will decide to re-enable chains as they are deemed safe.' Co-founder Chad Barraford wrote on Oct. 31 that 'THORNode operators have zero information that isn't already public and readily available in real time,' as the FBI asked THORNode operators and others to block addresses tied to the hackers. Fellow co-founder JP Thor posted on Nov. 1 that operators who are uncomfortable can leave and others can join, and that 'nobody knows who the full set of THORNodes are.'
Jonty also disputed a Nov. 2 post from Arkham saying the Binance hacker had been spotted depositing to Binance; that post has since been deleted.
What is still unclear
THORChain had not announced a date for reopening the remaining chains, according to Unchained's report. Jonty said whether Binance keeps supplying liquidity to arbitrage traders is an open question, adding that he imagined 'that's a debate that's being had internally at Binance.' Asked how much THORChain activity is laundering, he said that on days of most hacks he attributed to TraderTraitor, the FBI's name for the North Korean group, including Bitget, LayerZero and WazirX, '99%-plus of the volume through THORChain on those given days' was people laundering money on behalf of North Korea. He said he did not know the all-time share but imagined it was still the vast majority. The figure was his estimate; he cited no dataset, and Unchained found none that measures it.
What to watch
Watch whether THORChain re-enables BNB Smart Chain, Cosmos Hub and Solana, and whether the protocol or node operators provide more detail on the criteria used to judge chains safe. Also watch whether Binance changes how it supplies liquidity to arbitrage traders, and whether independent data emerges to test Jonty's estimate of laundering volumes. The FBI's request to block hacker-linked addresses and any response from THORNode operators remain part of the story.
Questions readers ask
What caused the THORChain halt?
A one-block Ethereum reorg removed a 10 ETH deposit that THORChain had already credited. A swap failed its price limit, THORChain refunded funds its vault never received, and the sender's real deposit was also refunded, creating an extra 10 ETH payout that triggered an automatic pause.
Which chains are still paused?
As of the Nov. 3 reports, BNB Smart Chain, Cosmos Hub and Solana remained halted. Cosmos Hub and Solana had been paused since before the Ethereum reorg, according to THORNode data cited by Unchained.
What did analyst Jonty say about North Korea?
He said node operators would have to vote to upgrade the protocol and re-enable chains, and that a yes vote would knowingly anticipate North Korea using THORChain to launder billions of dollars in stolen money. He said he would not vote for that.
