THORChain developer “Pluto” resigns over failure to block illicit transactions.
The FBI urged exchanges and validators to prevent North Korean money laundering.
THORChain is facing internal conflicts after a developer resigned over its handling of illicit funds. The controversy erupted when validators failed to block transactions linked to the North Korean Lazarus Group.
A core THORChain developer, known as “Pluto,” announced their resignation on February 27. They stated they would no longer contribute but would assist in transitioning responsibilities. Their exit followed a failed attempt to stop transactions tied to North Korean hackers.
Validator “TCB” revealed that they were one of three validators who voted to halt Ethereum trading on the protocol. However, the decision was overturned within minutes. Another validator vote was all it took to undo the block.
THORChain Under Pressure for Security Concerns
The Lazarus Group, responsible for stealing $1.5 billion from the crypto exchange Bybit, has reportedly laundered $605 million through THORChain. The FBI urged validators and exchanges to take immediate action against the illicit transactions.
TCB warned that failure to act could escalate the situation into a national security crisis. They stressed that the majority of funds flowing through THORChain are stolen, making it a growing target for authorities.
Despite the controversy, THORChain’s transaction volume has surged. On February 26, the protocol processed $860 million in swaps, marking its highest-ever daily volume. On February 27, it handled another $705 million. Some believe the rising volumes are due to illicit funds moving through the network. However, THORChain founder John-Paul Thorbjornsen defended the protocol, denying money laundering claims.
Thorbjornsen insisted that sanctioned wallets had never interacted with THORChain. He explained that hackers move funds faster than screening services can detect. He also argued that expecting blockchains to enforce censorship is unrealistic.
Furthermore, he highlighted that THORChain nodes operate under strict rules. If a node fails to follow protocol, it can be removed. He downplayed concerns, stating that validators uncomfortable with the situation could simply exit.
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