Why THORChain Rejected the Freeze Request
A wallet associated with the Bitget exchange hack has moved approximately $6.3 million worth of Ethereum into Bitcoin. This transaction occurred via the THORChain decentralized protocol. The movement happened shortly after THORChain declined Bitget’s urgent request to freeze specific addresses. The initial security breach at the exchange took place on September 24.
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What is a euro-pegged stablecoin?The hacker executed twenty-seven separate swap transactions during this period. These operations converted roughly 2,390 Ethereum tokens into their Bitcoin equivalent. The funds were routed through THORChain, a cross-chain liquidity protocol that allows assets to move between different blockchains without using centralized intermediaries. The timing of these swaps suggests the attacker acted quickly to diversify their holdings before the network could implement any defensive measures.
THORChain operates on a decentralized governance model where protocol changes require community consensus. When Bitget requested an emergency freeze of the compromised addresses, the network’s governance mechanism did not approve the measure in time. This decision highlights the tension between speed and decentralization in DeFi protocols. Exchanges often prefer rapid intervention to stop fund movements, but decentralized networks prioritize maintaining their non-custodial structure. The rejection left the hacker free to execute their planned swaps without interruption.
What Does This Mean for Exchange Security?
The specific addresses involved in the September 24 breach were identified by Bitget’s security team. They flagged these wallets as suspicious and submitted the freeze proposal. However, the lack of immediate approval allowed the attacker to maintain control over the stolen assets. This incident underscores the difficulty exchanges face when dealing with decentralized infrastructure that lacks a single point of administrative control.
The conversion of Ethereum to Bitcoin signals a strategic shift by the hacker. Bitcoin is generally considered a more established store of value compared to newer altcoins. By moving funds into Bitcoin, the attacker may be preparing for a long-term hold or planning to cash out through less traceable channels. The use of THORChain adds another layer of complexity to tracking the funds, as the protocol obscures the direct link between the source and destination chains.
Frequently Asked Questions
Security experts note that decentralized swaps offer significant advantages for attackers seeking anonymity. Centralized exchanges can freeze accounts, but decentralized protocols like THORChain rely on smart contracts that execute automatically once conditions are met. This event serves as a reminder for other exchanges to consider how they interact with DeFi protocols during emergencies. Future breaches may see similar tactics employed if decentralized networks continue to reject emergency freeze requests.
How much Ethereum was converted to Bitcoin? The hacker swapped approximately 2,390 Ethereum tokens. This amount was valued at around $6.3 million at the time of the transaction. The swaps were conducted through the THORChain network.
Why did THORChain reject the freeze request? THORChain uses a decentralized governance system for protocol decisions. The emergency freeze request from Bitget did not receive sufficient consensus to pass quickly enough. Consequently, the hacker was able to complete all twenty-seven swaps before any restrictions could take effect.
