tl;dr
Thorchain, a decentralized exchange protocol focusing on interoperability, is experiencing internal conflicts leading to the departure of key developers. The disagreements center around handling illicit funds, particularly those linked to North Korea's Lazarus Group using the protocol to launder Eth...
Thorchain, a decentralized exchange protocol, is facing internal conflicts leading to the departure of key developers. The disagreements center around handling illicit funds, particularly those linked to North Korea's Lazarus Group using the protocol to launder Ethereum stolen in the Bybit hack. Concerns about Thorchain's decentralization claims have surfaced due to its smaller and more centralized validator set, making it vulnerable to regulatory pressure and enforcement actions. The departure of developers raises uncertainty about the project's future, as allowing illicit transactions could lead to regulatory action, while enforcing restrictions may alienate users prioritizing decentralization.
Pluto, a core Thorchain developer, announced his resignation on February 27th, citing frustration over the network’s inability to block sanctioned transactions. Another developer, known as TCB, has also indicated he may step away unless immediate action is taken to prevent North Korean hackers from using the platform. Thorchain's claims of decentralization have been questioned, highlighting its smaller and more centralized validator set compared to Bitcoin or Ethereum, which makes it vulnerable to regulatory pressure and enforcement actions.
The situation places Thorchain at risk of further disruptions, with potential liquidity issues if wallet providers and infrastructure partners step away. Law enforcement agencies, including the FBI, are increasing their focus on Lazarus Group’s laundering methods, which could bring additional scrutiny to Thorchain. The departure of key developers raises questions about the project’s future, as regulating illicit transactions might lead to regulatory action, while enforcing restrictions may alienate users prioritizing decentralization.