The Decentralised exchange THORSwap disables parts of its website interface Thursday after the hacker who stolen $450 million from FTX last year started using the platform to convert stolen Ether to Bitcoin.
Since they began moving funds on September 30, the hacker sent about $131 million of it to Thorswap and the privacy protocol Railgun, according to Onchain data compiled by Arkham Intelligence.
In a Friday morning X post, the official THORSwap account announced it had transitioned the exchange's interface into maintenance mode after consulting with legal counsel and law enforcement.
The move stops users from interacting with the interface for trading, but leaves other services such as lending, borrowing and staking operating.
Although it effectively prevents everyday users from interacting with THORSwap, those with enough technical skill can still use THORSwap by interacting directly with its smart contracts.
But not everyone in DeFi thinks about THORSwap's decision to pause trading.
Some called the decision 'disappointing' and questioned THORSwap's commitment to creating an open and permissionless platform.
FTX has said the hacker is likely to convert stolen currency into Bitcoin, which is likely the first step in laundering the funds and breaking the chain of traceability.
When money is converted to Bitcoin, it's much easier to invest in coin mixing services before attempting to cash out through crypto exchanges that do not require know-your-customer checks, such as Fixed Float.
Onlookers have suggested that the Lazarus Group, a rogue North Korean hacker, may have been behind the attack.
Some are more sympathetic to THORSWAP's situation.
And there's a good reason for THORSwap's developers to be worried.
In August, Roman Storm and Roman Semenov, developers at privacy protocol Tornado Cash, were charged by the US Department of Justice with money laundering and sanctions violations.
The DoJ alleges that Tornado Cash facilitated more than $1 billion in money laundering, including hundreds of millions for North Korea's Lazarus Group.
Tim Craig, who works at DL News, is a Scotland-based DeFi Correspondent.