Bitget has approached THORChain with a request to block addresses linked to a recent hack amounting to approximately $387.5 million. This raises questions about how much permissioned networks should intervene when stolen funds pass through them. The stolen assets moved across several blockchains and services, including Ethereum, BNB Chain, and THORChain, before portions were converted into Bitcoin. THORChain can suspend trading in emergencies, but broader intervention could disrupt legitimate users' operations and require independent node operators to comply with new transaction restrictions. Investigators have tracked addresses controlled by the perpetrators across eight networks, demonstrating that open transaction records remain useful even when stolen funds move between chains.
Bitget CEO Gracy Chen last week urged THORChain to deny services to the identified perpetrators' addresses. THORChain responded by pointing to Bitcoin, Ethereum, and BNB Chain. What responsibility should these networks bear when stolen assets pass through them? The cryptocurrency industry has long advocated for infrastructure operating without discretionary gates, and now, following a major theft, some are calling for this infrastructure to gain such powers.
The attack on Bitget occurred due to a vulnerability in a third-party security product. The perpetrator gained access to internal credentials and issued fraudulent withdrawal commands. Bitget claims its private keys and cold wallets remained secure. Meanwhile, questions about whether Bitcoin miners and Ethereum validators should reject these proceeds remain pertinent.
THORChain is not identical to a base blockchain. It manages liquidity pools and vaults secured with threshold signatures, and groups of independent node operators authorize outbound transactions. THORChain's governance process channels protocol changes through stages of development, review, and node approval. Bitget's request to block addresses is akin to attempting to change transaction rules within the network, which could have implications for a broader audience than just the perpetrators.
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