Security firm GoPlus Security has challenged THORChain’s decentralization claims after tracing the movement of stolen funds from the Bitget exchange hack. The illicit assets passed through THORChain’s cross-chain protocol without being blocked by validators. GoPlus analytics data reveals that 101.5 BTC directly linked to the Bitget hack was withdrawn via the network. The Bitget breach resulted in total losses between $351.6 million and $387.5 million. Beyond the hundreds of Bitcoins, GoPlus monitoring also identified 27.63 million XRP transferred toward the Bitcoin network through the same protocol.
A Different Class from Pure Layer-1s
THORChain’s decentralization status has come under scrutiny following these findings. GoPlus argues that the protocol’s architecture cannot be compared to pure Layer-1 networks like Bitcoin or Ethereum. The primary distinction lies in the power structure within the ecosystem. THORChain validators hold emergency control powers centralized among a specific group. Official documentation notes that a single node operator has the authority to execute a pause command (make pause). This single command can freeze the entire system for 720 blocks, or the equivalent of one hour. This pause duration can even be continuously extended with the support of other nodes.
Veto Power Over Outbound Transactions
In addition to freezing the system, node operators wield control during the transaction execution phase. They hold on-chain voting rights through the Mimir parameter system. This mechanism grants the authority to halt trading on specific chains at any time. Network operators also reserve the right to withhold transaction signature authorizations if they detect an issue. When processing outbound asset transfers, THORChain relies on a shared vault system using a threshold signatures scheme. This architecture demonstrates that cross-chain transfers ultimately hinge on the collective decisions of an active node set, rather than censorship-resistant base blockchain consensus.
The escape of stolen Bitget funds directly conflicts with the extensive powers granted to validators. If network operators have access to pause commands to halt trading, allowing 101.5 BTC and tens of millions of exploited XRP to pass through undermines their claims of neutrality. Decentralization cannot serve as an excuse when the tools to block asset laundering are clearly available. Reported by crypto.news.
Also read: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
