In a surprising turn of events for the THORChain community, developer Pluto announced his departure from the project following a controversial decision to block transactions linked to a North Korean hacker. The vote to implement this measure was quickly reverted, prompting Pluto to reveal his decision to no longer contribute to THORChain. Despite his departure, Pluto assured the community that he would remain available to Nine Realms for as long as needed and would facilitate a smooth transition of responsibilities.
The departure of Pluto has raised concerns within the validator community, with TCB also threatening to exit the protocol unless a solution is swiftly implemented to prevent the flow of hacker funds. TCB had previously been one of the validators who voted to halt Ethereum trading on the protocol in an effort to disrupt the movement of funds from the notorious North Korean hacking group, Lazarus Group. However, this decision was overturned within minutes, leading to heightened tensions within the THORChain ecosystem.
Amidst these developments, THORChain developer Oleg Petrov confirmed that the vote to block hacker-linked transactions had been reversed, further exacerbating the discord within the project. Pluto had previously indicated that the team was actively working on implementing screening services to prevent illicit funds from circulating within the protocol, but the recent events suggest a lack of consensus on the way forward.
Furthermore, data from LookOnChain revealed that the Bybit hacker had been utilizing THORChain to process stolen funds from a major crypto hack, laundering a significant amount of Ethereum through the protocol. This illicit activity resulted in a significant increase in trading volume and generated substantial fee revenue for the protocol, attracting scrutiny from the crypto community and regulatory authorities.
In response to the controversy surrounding the reverted vote and the departure of developers, THORChain founder John-Paul Thorbjornsen took to social media to address the situation. He expressed his recommendation for nodes to continue trading on the platform, emphasizing that the listed hacker addresses had not interacted with THORChain according to the Office of Foreign Assets Control and FBI. Thorbjornsen pledged to support nodes in implementing static deny lists based on regulatory lists but opposed third-party entities dynamically updating the list at the protocol level.
Thorbjornsen also asserted that THORChain does not facilitate money laundering and encouraged traders to track the movement of funds themselves to discern their ultimate destination. Despite these reassurances, the contentious issue of illicit fund flows and security breaches remains a significant challenge for the THORChain project moving forward. As the community grapples with these issues, the future direction and stability of the protocol hang in the balance, with key stakeholders voicing diverging opinions on the best path forward.