RUNE’s gains become ThorChain’s loss as DEX lures hackers

• RUNE saw significant price growth at press time.
• Data revealed that 50% of all ETH to BTC swaps on ThorSwap involved stolen funds.

ThorChain [RUNE] experienced significant price growth recently, but alarming data suggested that it might be attracting illicit activities.

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The plot thickens

According to X (formerly Twitter) analyst Tayvano, ThorChain became an appealing DEX for attackers and hackers. Tayvano claimed that over the past four months, more than 50% of all Ethereum [ETH] – Bitcoin [BTC] transfers via ThorSwap Router had originated from stolen funds.

Welp, the hackers and money launderers—both the Russian/CIS region ones and North Korean ones—are loooooving @ThorChain lately.

In fact, in the last four months, ***more than 50%*** of the ETH -> to ThorSwap Router -> to BTC have been stolen funds.

rip. pic.twitter.com/V4KscNilRA

— Tay (@tayvano_) October 1, 2023

Specifically, Tayvano identified approximately 34,583 ETH (around $57 million) as “clearly” stolen funds being converted to BTC via ThorSwap’s Deposit w/ Expiry function, out of a total of around 53,183 ETH (approximately $88 million) transferred from ETH to BTC over the same period.

This constituted approximately 65% of the total volume.

Additionally, Tayvano pointed out that this figure only represented the stolen funds directly originating from theft addresses.

There was also evidence of another 3,300+ ETH that appeared to be undergoing laundering, with some originating from services like Tornado Cash and Railgun, or from transfers through exchanges.

Tayvano also identified addresses linked to the FTX [FTT] drain hack, totaling 19,944 ETH (approximately $32 million).

She suggested that North Korean hackers responsible for a recent Stake.com breach had also utilized ThorChain, moving a total of 8,143 ETH and 1.64 million Tether [USDT] (about $15 million) through the network.

Furthermore, Russian hackers involved in individual seed phrase compromises reportedly used ThorChain to move 4,195 ETH (around $7.1 million).

Reason for the interest in ThorChain

When asked why hackers seemed to prefer ThorChain, Tayvano argued that it’s because ThorChain’s builders have embraced them and celebrated their use of the protocol.

She explained that if you’re a hacker with a significant amount of stolen funds, ThorChain provides a means to convert assets to BTC without encountering significant freezing of assets along the way.

Tay, why do they love using Thorchain so much?

Is it because of the ease of bridging?

Or they think it holds some type of privacy ?

Or neither?

— identityunknown|chainreaper (@RiverRunnner) October 2, 2023

There was some pushback observed from users, who stated that ThorChain symbolized what a true permissionless DEX looked like.

So, you want permissioned dex’s?

You cant have your cake and eat it too

There is power in decentralization, for criminals and normies

— fst_nml (@fst_nml) October 2, 2023

This influx of illicit activity also raised concerns about ThorChain’s reputation and the potential impact on its native token, RUNE.

How did RUNE react?

Despite the negative attention surrounding ThorChain’s use in illicit activities, RUNE showed resilience. It surged by 12.11% in the last 24 hours and has demonstrated multiple higher highs and higher lows over the past month, indicating a bullish trend.

The Relative Strength Index (RSI) stood at 72.71 at the time of writing, suggesting the asset was slightly overbought, while the Chaikin Money Flow (CMF) at 0.19 indicated that money flow favored buyers.

Source: Trading View

However, these events have taken a toll on social sentiment around ThorChain and RUNE. Santiment’s data indicated that while Weighted Sentiment was bullish during RUNE’s price growth, it had declined as of press time.

Realistic or not, here’s RUNE’s market cap in BTC’s terms

This implied that negative comments and concerns about illicit activities have overshadowed positive sentiment regarding the protocol.

Source: Santiment

Despite these concerns, ThorChain has continued to expand its network and make improvements. Recently, the protocol collaborated with the Binance [BNB] network, suggesting that it was actively pursuing growth and development despite the above concerns.