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Internal Conflict at Thorchain as North Korean Hackers Leverage Network for Crypto Laundering
Thorchain is currently entangled in a serious internal conflict after it was discovered that the platform is being used by North Korean hackers to launder stolen cryptocurrencies. The controversy has already led to the resignation of one developer, with another threatening to follow suit unless immediate action is taken to prevent further illicit activities.
According to sources close to the matter, Pluto, a core Thorchain developer, announced his departure from the project on February 27th, citing frustration over the network’s inability to block sanctioned transactions. This move has raised concerns about the protocol’s decentralization and governance structure, with some calling it a major blow to the project.
Another prominent developer, known only as TCB, has also publicly expressed his discontent with the situation. In an impassioned post on X, he criticized Thorchain’s claims of decentralization, arguing that the network is largely controlled by a small group of infrastructure providers and corporate actors. He emphasized that while the protocol promotes itself as censorship-resistant, many wallet providers that integrate with it already enforce transaction filtering.
The controversy surrounds reports that North Korea’s notorious Lazarus Group has been using Thorchain to launder Ethereum (ETH) stolen in recent hacks. This revelation has put significant pressure on the platform’s governance structure and its ability to remain decentralized.
Thorchain’s inability to effectively block sanctioned transactions has raised questions about the project’s future viability. If it continues to permit illicit activities, regulatory action could be taken against it, potentially putting the entire crypto ecosystem at risk. On the other hand, enforcing stricter controls might alienate users who prioritize decentralization over compliance with regulations.
The situation is further complicated by the fact that Thorchain has a smaller and more centralized validator set compared to Bitcoin or Ethereum. This lack of decentralization makes it vulnerable to regulatory pressure and enforcement actions.
If wallet providers and infrastructure partners were to step away, the platform could face significant liquidity issues, ultimately putting its survival in jeopardy. Furthermore, law enforcement agencies, including the FBI, are increasing their focus on Lazarus Group’s laundering methods, which may also put Thorchain under scrutiny.
Thorchain has yet to release an official statement regarding the situation, but sources close to the matter suggest that urgent action is needed to address these concerns and prevent further damage.
