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THORChain Resumes Trading After Blocking Illicit Funds and Sanctioned Countries

THORChain Resumes Trading After Blocking Illicit Funds and Sanctioned Countries

THORChain, a Layer 1 blockchain that enables cross-chain swaps, has restarted its main exchange THORSwap after a week-long suspension. The crypto exchange was shut down last Friday after detecting some funds linked to the FTX hack in November 2022. The team has added new security measures to prevent the flow of illicit funds and comply with legal regulations.

THORChain’s RUNE Shows Signs of Recovery

THORChain’s native token RUNE surged by 10% overnight as the news broke, recovering from a 27% drop over the week. The exchange’s governance token THOR also rose by 11.5%. Trading volumes on THORChain jumped to $62 million on Thursday, up from below $30 million in recent days. The token currently trades at $1.67 according to CoinGecko.

THORSwap is a decentralized exchange that uses assets deposited on THORChain as liquidity pools to facilitate cross-chain exchanges. Users can swap tokens between different blockchains without intermediaries or custodians. The exchange claims to offer fast and cheap transactions, as well as high returns for liquidity providers.

THORChain Resumes Trading After Blocking Illicit Funds and Sanctioned Countries

However, the exchange also faces some challenges and risks. In addition to illicit funds, THORSwap has also updated its terms of service to block users from countries sanctioned by the US, such as Iran, North Korea, and Cuba. 

The team says it has partnered with an industry leader to add safety barriers and ensure legal compliance. Some users have criticized this move as contrary to the principle of decentralization and harmful to innocent people.

THORChain is not the only project that has faced security issues and regulatory pressures. In July 2023, Uniswap, the leading decentralized exchange on Ethereum, partnered with detective firm TRM Labs to analyze and block transactions that are likely linked to financial crimes. Other DeFi projects have also been hacked, exploited, or attacked by malicious actors.

The development of THORChain and THORSwap shows the potential and challenges of decentralized finance. While offering innovative solutions and opportunities for users, they also need to balance security, transparency, and compliance in a fast-changing and uncertain environment.

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