Thorchain is experiencing developer escape as hackers at Lazarus Group use blockchains that focus on interoperability to wash Ethereum (ETH) stolen in Bibit Hacks.
Thorchain Developer known as TCB announcement Plput, the unofficial lead developer of the protocol, has resigned. The TCB itself also shows his imminent departure unless a prompt resolution is implemented to prevent illegal flows related to North Korean actors.
The TCB statement highlighted the longstanding disparity between Thorchain's message on decentralization and the reality of its infrastructure.
The developers claim that the protocol is censored and not permitted, but in reality, a small group of business officials manages most of the network's infrastructure and user-facing services. He insisted this Contradictions expose protocols to regulatory scrutiny and threaten their long-term viability.
Thorchain is an authorized protocol focused on interoperability. However, given the ability to exchange native assets for each blockchain, bad actors are leveraging Thorchain's infrastructure to obscure stolen funds. This is the case after Bybit Hack, losing $1.5 billion on February 21st.
Recently, another developer known as TCB, Pluto, and Oleg Petrov used their power to vote to stop the ETH trade in Thorchain to prevent the Lazarus Group from washing their money.
Centralization and validator limitations
Thorchain's design choice contributes to what TCB describes as an overly centralized network that cannot withstand regulatory pressures.
Unlike Ethereum and Bitcoin (BTC), which boast thousands of independent validators, Thorchain relies on a smaller, tightly controlled group of operators. Network requirements for full infrastructure replication across all supported blockchains further complicate boarding onboarding onvolidata and limit decentralization.
Efforts to address these concerns, including implementing lightweight nodes and suggesting extended validator sets, are met with resistance.
Other protocols, such as ChainFlip, have implemented censorship measures quickly at the network level, but Thorchain has not yet adopted a similar strategy that contradicts industry trends.
Crisis on the horizon
According to TCB, many wallet providers that drive the majority of Thorchain's non-existent transaction volumes have already implemented transaction filtering on the front-end. If Thorchain continues to allow illegal funds to flow through the network, these providers could cut off integration and further separate the protocol from legitimate liquidity sources.
The TCB warned that these providers' eviction and regulatory scrutiny could lead to a Torcaine crisis. By rethinking the involvement of key infrastructure providers and developers, the protocol faces operational and reputational risks.
The concerns raised reflect the broader industry tensions between the ideals of decentralization and the reality of compliance with a global money laundering framework. The possibility that Socaine will be involved in North Korea's biggest crypto theft will significantly raise stocks.
The TCB argued that the issue would move beyond protocol governance into the territory of national security, where most transaction flows consist of stolen funds related to authorized national activities. He added that Tall chains can face enforcement actions that could put operations at risk if they are perceived as conduits of large-scale money laundering.
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