THORSwap exchange said on Friday it would shift into “maintenance” mode after a series of illicitly-linked funds were passed through the platform in the past several days – including several transactions originating from the infamous "FTX Exploiter" wallet that drained funds from Sam Bankman-Fried's FTX exchange in the days following its bankruptcy last year.
And according to one blockchain sleuth, Lookonchain, the exploiter has since started – early Friday – swapping ether (ETH) into the Threshold Network's tBTC tokens, a bridged form of bitcoin (BTC).
A THORSwap developer said the team “stands firmly against any and all criminal actions” in a message to CoinDesk.
“Yesterday, following a careful evaluation of the situation and consultation with advisors, legal counsel and law enforcement, the decision was made to temporarily transition the THORSwap interface into maintenance mode,” THORSwap developers said in a tweet.
“This action was taken to swiftly curtail any further potential illicit activity. THORSwap will remain in this mode until a more permanent and robust solution can be implemented to ensure the platform's continued security and integrity,” they added.
Fellow THORChads,
A pressing and persistent concern has recently come to light: the potential movement of illicit funds through THORChain and, specifically, THORSwap. Such activities have no place on the THORSwap platform, and THORSwap stands firmly against any and all criminal…
— THORSwap ⚡ #BetterThanCEX (@THORSwap) October 6, 2023
The move effectively pauses trading operations. However, services such as lending, borrowing and staking actions are all fully operational.
THORSwap runs on THORChain, a network that allows users to freely trade tokens between different blockchains.
In November 2022, hours after FTX and its related companies filed for bankruptcy, an unknown party managed to drain various wallets of as much as $600 million.
Last week, the hacker, whose identity remains unknown to this date, managed to pass over 15,000 ether using various platforms, including THORSwap. The funds' sudden movement on the eve of Bankman-Fried's criminal trial this week in a federal court in New York has deepened one of the ongoing mysteries around the exchange's collapse last year.
(UPDATE 13:36 UTC: Adds comments from Lookonchain about FTX Exploiter swapping ETH into tBTC.)
Bradley Keoun contributed reporting.
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