THORChain rejects Bitget request to block hacker wallets

THORChain has rejected Bitget CEO Gracy Chen's request to block addresses associated with the exchange's $387.5 million security breach, asserting its permissionless network cannot selectively censor transactions. Chen accused the protocol of aiding known stolen funds by processing them, while THORChain maintained its network operates without central intermediaries, leaving transaction processing to protocol rules and independent node operators.

The incident has sparked debate on how decentralized finance infrastructure should handle stolen assets. Initially, Bitget estimated $351.6 million in stolen assets, which later rose to $387.5 million after accounting for additional networks. The breach affected parts of Bitget's hot and warm wallet infrastructure, with cold wallets remaining secure.

Cybersecurity firms Mandiant and SlowMist were brought in to assist with the investigation. Chen claimed attackers exploited a wallet backend and used fake transaction data, not stolen private keys. Blockchain analysis revealed the stolen BNB and TRX passing through intermediaries before reaching THORChain, where they were converted into Bitcoin.

TRM Labs traced roughly $9.8 million in BNB to Bitget's hot wallet, which then reached THORChain. The dispute involves THORChain's technical ability to temporarily pause network activity, raising questions about the protocol's obligation to intervene against identified stolen assets.