Can THORChain Be Prosecuted for Not Blocking Stolen Bitget Funds?

Decentralized cross-chain swap platform THORChain is facing legal scrutiny after refusing to block addresses linked to the $387.5 million Bitget hack, allegedly carried out by North Korean threat actors. Bitget CEO Gracy Chen publicly demanded that THORChain "refuse service to these addresses," but the protocol pushed back, stating it is "decentralized and permissionless like Bitcoin, Ethereum, and BNB Chain." The decision is especially contentious because THORChain paused its network in May following a $10.7 million exploit of its own funds—raising questions about whether selective intervention is technically possible and legally defensible.

This is not THORChain's first encounter with illicit flows. Approximately $1.2 billion stolen in the record-breaking $1.46 billion Bybit hack earlier this year was laundered through THORChain, which had retired its admin key just 11 days prior. By contrast, NEAR Intents took the opposite approach, using its automated SHIELD program to block addresses tied to the Bitget hack from swapping roughly $50 million—and even declined the 5% bounty Bitget offered for the recovery. NEAR Intents is now facing criticism from decentralization purists for not being sufficiently permissionless.

Crypto lawyer Yuriy Brisov of D&A Partners told Magazine that THORChain's legal position is precarious. "When they block some addresses, they show that their nodes aren't truly decentralized," Brisov said, noting that exercising censorship power in good faith opens the protocol to other legal claims. The strongest available defense, he argued, is the one used successfully by Uniswap—insisting the protocol is fully decentralized and beyond any party's control. A judge dismissed a lawsuit against Uniswap in March after investors sued over rugpull tokens purchased through the platform. Brisov warned that THORChain's own precedent of selectively halting operations could undermine that defense, leaving its developers exposed to money laundering liability as regulators increasingly scrutinize DeFi protocols that facilitate the movement of stolen funds.