THORChain, a decentralized protocol that facilitates cryptocurrency swaps across different blockchains, has experienced an unexpected surge in activity following the recent Bybit hack. The protocol processed a record-breaking $4.66 billion in swaps in the week ending March 2, with Sunday alone accounting for over $1 billion in transactions, according to data from DefiLlama.
The spike in activity can be attributed to the hack of the cryptocurrency exchange Bybit on February 22, where a North Korean malicious entity made off with $1.4 billion in ether. It is believed that the hackers used THORChain to swap and launder the stolen funds, leading to the unprecedented level of activity on the platform.
According to a report from blockchain analytics firm Nansen, the hackers transferred the stolen funds through a complex network of wallets, with THORChain being one of the key channels used for laundering the money. Other entities involved in the process included Paraswap, Mantle, OK DEX, and DODO.
Onchain analyst EmberCN revealed that the hackers managed to launder the entire balance of 499,000 ETH (equivalent to $1.39 billion) stolen from Bybit in just ten days. This process resulted in a significant drop in the price of ETH, from $2,780 to $2,130. Additionally, THORChain earned $5.9 billion in transaction volume and $5.5 million in handling fees as a result of the hackers’ money laundering activities.
CoinDesk reached out to THORChain for a statement regarding the incident, but the protocol has yet to respond. The platform has undoubtedly benefitted from the surge in activity, although it raises concerns about the potential misuse of decentralized protocols for illicit purposes.
Overall, the Bybit hack has shed light on the vulnerabilities of the cryptocurrency ecosystem, highlighting the need for enhanced security measures and regulatory oversight to protect users and prevent similar incidents in the future.