THORSwap Implements Maintenance Mode to Address Illicit Activity
THORSwap, a decentralized exchange (DEX) built on the THORchain liquidity protocol, has entered maintenance mode to prevent further movement of illicit funds on its platform. This decision was made in response to concerns about bad actors using THORSwap for illegal activities. The DEX will remain in maintenance mode until a more permanent solution can be implemented to enhance security and integrity. However, other services such as staking, borrowing, and lending will continue to operate normally. The move comes shortly after it was revealed that the FTX hacker had transferred $38 million worth of Ethereum using Railgun and THORChain. Additionally, allegations have been made that Russian and North Korean hackers favor THORChain for their operations.
Rising Cross-Chain Crime: $7 Billion Laundered Illicitly
A recent report by blockchain analytics firm Elliptic highlights the growing issue of cross-chain crime, with $7 billion in ill-gotten crypto assets laundered through cross-chain and cross-asset services as of July 2023. This figure surpasses previous estimates and is attributed to the anonymity and stability offered by diverse cryptocurrencies. Criminals are taking advantage of gaps in know-your-customer (KYC) procedures and shifting to cross-chain protocols due to enforcement actions against non-compliant exchanges. The report identifies the Lazarus Group, a North Korean cyberhacking organization, as the primary source of laundered funds through cross-chain methods, totaling over $900 million.
Hot Take: Addressing Illicit Activities on Decentralized Exchanges
The implementation of maintenance mode by THORSwap demonstrates the importance of addressing illicit activities on decentralized exchanges. By temporarily halting operations and working towards a more secure solution, THORSwap aims to protect its users and maintain the integrity of its platform. The rise in cross-chain crime, as highlighted by Elliptic’s report, calls for increased vigilance and regulation to prevent the laundering of illicit funds. It is crucial for decentralized exchanges to prioritize security measures and collaborate with law enforcement agencies to identify and apprehend bad actors. As the crypto industry continues to evolve, combating illicit activities will be a collective effort to ensure the trust and legitimacy of decentralized finance.
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