Thorchain Lead Developer Leaves as Vote to Block Hacker Funds Fails

In a surprising turn of events, Thorchain core developer Pluto has announced his departure from the project following a contentious decision to reverse a vote aimed at blocking transactions linked to North Korean hackers. The move has stirred unrest within the decentralized protocol’s community, with a validator also threatening to leave unless swift action is taken to address the flow of illicit funds.

Pluto shared his decision in a recent post, stating he would no longer contribute to Thorchain but would remain available to assist Nine Realms during the transition period to ensure a seamless handover of his duties.

The drama unfolded after validator TCB, who quoted Pluto’s announcement, issued a stern warning. TCB declared they would abandon the protocol if the Thorchain team didn’t quickly implement measures to halt funds tied to North Korean hacking group Lazarus. TCB revealed they were among three validators who had supported a vote to suspend Ethereum trading on the platform as a means to curb these illicit flows. However, other developers confirmed on that the vote was overturned within minutes, reigniting debates over the protocol’s security and ethical stance. This reversal came despite Pluto’s earlier assurance to followers that the team was working on screening services to prevent such funds from passing through Thorchain.

According to many blockchain observers, it has been revealed that the Bybit hacker, responsible for one of the largest crypto heists in history, has laundered approximately 270,000 ETH—equivalent to $605 million, or 54% of the stolen funds—through Thorchain. This activity has significantly boosted the protocol’s trading volume, pushing it to $2.91 billion over five days and generating $3 million in fees. As of now, daily trading volume stands at $650 million, a sharp rise from its pre-hack average of $80 million.

Founder Responds to Growing Controversy

Thorchain founder John-Paul Thorbjornsen has stepped into the fray, addressing the situation. He admitted to recommending that nodes continue trading despite the concerns, arguing that none of the hacker addresses flagged by the Office of Foreign Assets Control or the FBI have interacted with the protocol. Thorbjornsen emphasized that he hasn’t been contacted by any authorities, nor is he aware of nodes that have. He expressed willingness to support a static deny list based on official OFAC and FBI designations if nodes agree, but he drew the line at allowing a third party to dynamically update restrictions at the protocol level.

In a separate statement, Thorbjornsen defended Thorchain’s operations, asserting that the protocol itself doesn’t launder money. He pointed out that traders can trace Ethereum-to-Bitcoin swaps and follow their paths, which often lead to centralized exchanges where funds are converted to fiat. He urged those concerned to report such deposits to the exchanges involved rather than solely blaming Thorchain. The founder’s response highlights the delicate balance between maintaining a decentralized system and addressing the real-world implications of illicit activity—a challenge that continues to test the protocol’s resilience and reputation.