THORChain co-founder Chad Barraford said he will ask the protocol’s Treasury about sending part of what its developer fund earned from the Bitget hack back to the exchange. “I’ll take that up with the Treasury and have a conversation about that idea,” Barraford said on Unchained on Monday, in a debate with security expert Taylor Monahan, who also co-hosts Unchained’s Uneasy Money podcast.
The Treasury could take “some percentage of the income” that the developer fund “actually has control over” and send it to Bitget, he said on the show. He said he hadn’t looked at what the fund receives in a while.
Attackers took $387.5 million from Bitget on Sept. 24 and routed stolen funds through THORChain into bitcoin. The protocol rejected Bitget’s request to block the attacker’s wallets, saying it “doesn’t censor by design.” Bitget has said it is using its Protection Fund to cover the losses.
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What the Swaps Earned
The laundering swaps paid $573,226 in THORChain liquidity fees through Oct. 2, according to an analysis by researcher Andrey Sergeenkov. That was 75.3% of the $761,725 in protocol and service fees he tracked, a total that does not include affiliate fees.
Monahan said on the show that the accusation is that THORChain “profits directly and very heavily” from stolen funds, which makes people there less likely to act. Barraford said on the show that the developer fund’s share is about 5%. “It’s a very small sliver,” he said. Over the protocol’s full history, he said, illicit income is “barely a blip.” Monahan said that over a short enough period, those flows are “literally the majority of the fees and the majority of the volume.”
Monahan argued that even a six-figure return would matter, because it would show the protocol does not want to profit from thefts. “To be fair, I don’t profit at all from this activity,” Barraford said on the podcast, later narrowing that to directly, “or maybe not even indirectly.”
Up to Each Node
Node operators who object can send their own rewards back to Bitget, Barraford said. Asked whether he would recommend it, he said on the show, “I think it’s up to the individual to make their own choices. It’s not up to me.”
He maintained that THORChain cannot block individual swaps fast enough, because its validators take days to reach the two-thirds majority needed to act. Monahan said THORChain has acted quickly before when it chose to, pointing to its decisions on its ThorFi lending feature and on its own hack. Barraford replied on the show, “With consensus, you could change anything you want,” adding that this holds for any protocol and that Bitcoin and Ethereum also choose not to act.
Talks With U.S. Agencies
Asked about THORChain’s legal exposure, Barraford said U.S. government agencies, which he declined to name, reached out to him in 2022 or 2023 to understand how THORChain works. “They weren’t really interested back then either,” he said on the podcast, adding that the conversations were “not adversarial.”
Related Listen: How Bitget Is Chasing $388 Million in Stolen Funds After a Zero-Day Hack
The post THORChain Co-Founder Will Ask Its Treasury About Refunding Fees From Stolen Crypto appeared first on Unchained.
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