The developer of Thorchain, known as Pluto, has announced its departure from decentralized liquidity protocols following a controversial decision involving North Korea-related transactions.
Controversy emerged after the votes by network validators to block these transactions, sparking concerns about the platform's governance and resilience to regulatory challenges.
Validator pushback and scrutiny
Plput confirmed his resignation in a social media post, saying, “I will no longer contribute to Thorchain.” Despite his resignation, he pledged to ensure a smooth transition by keeping the responsibility available until it is fully handed over.
** Go from Thorchain**
Validators, Developers, Community Members: Effectively, I will no longer contribute to Thorchain. As long as necessary, nine areas are maintained and an orderly handoff of responsibility can be ensured. have…
– plumo (9r) (@pluto9r) February 27, 2025
The move marks the pinnacle of the dispute over how the protocol should handle transactions tied to North Korean hackers. The decision to reverse the vote by blocking North Korea-related transactions not only led to Pl-Pun's resignation, but also encouraged other baritellers to consider retreating.
The TCB is a well-known validator and warned that if the platform does not adopt measures to prevent such illegal flows more contributors could leave.
In their statement, the TCB highlighted the scale of the issue, noting that the Lazarus Group, a North Korean hacking group, had leaked a significant amount of stolen cryptocurrency through socialising. This situation led to an increase in scrutiny from both validators and external authorities.
I was part of the three validators who voted for the suspension $ eth transaction @thorchain
I've been discussing @pluto9r, @ol3gpetrov, @zachxbt Others about blocking flows from a bibit hack
I hope the validator gets a solution before resuming the transaction@ol3gpetrov teeth…
– TCB (@1984_is_today) February 27, 2025
In addition to the urgency, the FBI and other agencies are urging blockchain platforms to block transactions linked to the Lazarus Group. The group is involved in a series of major cryptocurrency thefts, including a record hack that includes $1.5 billion of stolen funds.
Issues to decentralization of Thorchain
This controversy sparked a broader debate over Thorchain's claim that it is a fully decentralized protocol. Critics, including some verifyers, have argued that the network is not decentralized enough to withstand regulatory pressures and the demands of truly permitted systems.
TCB and others point out that the protocol relies on a relatively small number of validators, making it more vulnerable to intensive impacts.
Thorchain founder John-Paul Thorbjornsen says that protocol nodes are designed to follow established rules, and that nodes that do not want to be adhered to can be removed.
This ensures some degree of operational control, but also highlights the complexity of maintaining a balance between decentralization and effective governance.
Thorbjornsen further emphasizes that the Thorchain nodes are not directly related to the authorities, claiming that the platform's design is intended to allow open and permitted swaps.
Following this news, Thorchain's native token runes plummeted significantly, falling 14.3% in the past day to its current trading price. $1.31.
Special images created with Dall-E, TradingView chart
