THORswap Back Online After Detecting FTX Funds

THORSwap Resumes Operations After Detecting Illicit Funds

THORSwap, a decentralized exchange (DEX), has resumed operations after briefly going into maintenance mode due to detecting illicit funds on its platform. On Oct. 12, the platform took to X (formerly Twitter) to announce that users can now resume their regularly scheduled swapping of over 5,500 assets across 10 blockchains from their own self-custody wallets.

Initially, THORSwap had halted swaps on its platform on Oct. 6 as a precautionary measure to counter the potential movement of illicit funds. The DEX acknowledged that its platform had encountered illicit use and decided to pause to find a permanent solution to the misuse.

The latest announcement revealed that THORSwap has not applied any major changes on its platform other than the “shiny new terms of service.” This suggests that the DEX has taken necessary steps to ensure the security and safety of its users while investing in web 3.0 and blockchain technology.

THORSwap’s Updated Terms of Service

On Oct. 11, THORSwap revised its terms of service to state that users must comply with applicable laws, such as Anti-Money Laundering, and not engage in any activity that violates sanctions programs or involves any unlawful financial activity. Furthermore, THORSwap reserves the right to restrict users from using the platform if any violations occur.

The cryptocurrency community expressed its dissatisfaction with the updated terms of use, with many questioning the platform’s “decentralized” status in light of the new rules, which are similar to those of a centralized exchange. “Is there any reason to use your services instead of a regular CEX? Did you just copy – paste their terms of service?” one user asked.

Erik Voorhees, founder of ShapeShift, clarified the difference between THORSwap and THORChain, the network it is built on, in terms of centralization. He explained that THORSwap is a “centralized company that made a decision about their own interface,” while THORChain is decentralized.

The introduction of web 3.0 has sparked questions about how it is different from web 2.0 and how one can invest in it. Although web 3.0 has not officially started, it is expected to bring greater decentralization, improved security, and increased privacy to the internet of things.

THORSwap’s Return and Illicit Funds

THORSwap recently announced its return to the market, and stated that it had partnered with an “industry leader” to put additional measures in place to prevent the flow of illicit funds. The protocol noted that it may need to “fine tune things over the coming days.”

The same day, blockchain analytics firm Elliptic reported that the hacker of the now-defunct crypto exchange FTX had started moving the stolen funds in late September 2023. This marked the first time those funds had been moved since the attack.

Elliptic reported that the anonymous hacker used THORSwap to convert 72,500 Ether (ETH), or about $120,000 million, into Bitcoin (BTC) before sending crypto to sanctioned cryptocurrency mixers like Sinbad.

A spokesperson for THORSwap highlighted that, although FTX exploiter’s funds can be traced easily once they have been swapped to BTC, they are no longer traceable once they have gone through a mixer. This emphasizes the importance of investing in Web 3.0 technologies, such as Internet of Things, to ensure the security of funds.