Decentralized exchange (DEX) THORSwap has resumed operations after briefly entering maintenance mode due to the detection of illicit funds on the platform.
THORSwap announced on X (formerly Twitter) on October 12 that the platform was back online. The platform requires users to resume regular exchanges of more than 5,500 assets across 10 blockchains from their own self-service wallets.
The protocol initially stopped swaps on its platform on October 6 as an immediate measure to deal with the potential flow of illicit funds. THORSwap admitted that its DEX platform was experiencing illegal use and decided to take a break to find a permanent solution to the abuse.
According to the latest announcement, THORSwap has yet to make any major changes to its platform, aside from “shiny new terms of service.” THORSwap’s new terms of service, updated on October 11, stipulate that users must comply with applicable laws such as anti-money laundering and agree not to participate in or assist any activities that violate sanctions programs or involve any illegal financial activities. The updated terms also state that THORSwap reserves the right to potentially restrict users from using the platform in the event of violations, stating:
"THORSwap reserves the right to terminate your access to the THORSwap Service at any time, without notice, for any reason, including but not limited to breach of these Terms."
The cryptocurrency community has expressed outrage over THORSwap’s updated terms of use, with many questioning the platform’s “decentralized” status in the context of new rules, which sound more like those of centralized exchanges. “Is there any reason to use your service instead of regular CEX? Did you just copy-paste their terms of service?” asked one X user.
ShapeShift founder Erik Voorhees said THORSwap differs from THORChain (the network it is built on) in terms of centralization. THORSwap is a “centralized company that decides its own interface,” while THORChain is decentralized. THORSwap said that in addition to updating its terms of service, it is working with "industry leaders" to put in place some additional protections to prevent illicit financial flows. The announcement added that the agreement may still require "fine-tuning in the coming days." THORSwap's return comes on the same day that blockchain analytics firm Elliptic reported that hackers at now-defunct cryptocurrency exchange FTX had begun moving stolen funds in late September 2023. The transactions mark the first time these funds have been moved since the attack.
According to Elliptic, Anonymous Hacker Used THORSwap to Swap 72,500 Ethereum
, or approximately $120 billion invested in Bitcoin Before sending your crypto to a sanctioned cryptocurrency mixer like Sinbad.
A spokesperson for THORSwap emphasized in a statement that FTX exploiters’ funds can be easily traced once converted into BTC. But once cryptocurrencies pass through a mixer, they are no longer traceable.
