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Ethereum reorg forces THORChain pause, stalling laundering of stolen Binance funds

An emergency pause triggered by an Ethereum chain reorganization on THORChain halted cross-chain swaps and inadvertently delayed North Korean hackers from laundering funds stolen from Binance, according to Chainalysis.

A Chainalysis diagram showing connections between THORChain.com and Binance exploit funds, with a caption stating that an emergency pause temporarily prevents swaps.
Image: @Cointelegraph

An Ethereum blockchain reorganization triggered an unexpected disruption on cross-chain protocol THORChain on the morning of October 31, inadvertently stalling efforts by North Korean actors to launder stolen cryptocurrency, according to blockchain analytics firm Chainalysis.[1][2]

The reorg caused THORChain to mistakenly process a double refund for a user who had deposited 10 ETH. The glitch triggered an automated emergency pause on the protocol, halting cross-chain swaps across a majority of THORChain's bridges for all participants.[1][2][3]

Because the freeze blocked all swap activity across those bridges, it temporarily cut off North Korean money launderers attempting to move a significant portion of assets taken in a Binance exploit. Chainalysis noted that neither the exploiters nor legitimate users will be able to swap through the affected bridges until THORChain resumes normal operations.[1][2]

Key facts

  • An Ethereum chain reorganization on the morning of October 31 caused THORChain to mistakenly issue a double refund on a 10 ETH deposit, according to Chainalysis.
  • The double refund prompted an emergency pause across THORChain, suspending cross-chain swaps across a majority of its bridges.
  • The operational freeze blocked North Korean money launderers, inadvertently delaying their laundering of funds stolen in an exploit of Binance.
  • Chainalysis reported that swaps will remain unavailable to all users, including the hackers, until THORChain restores service.

Sources · 3 sources

  1. WB

    Wu Blockchain@WuBlockchainPost on X ·

    Chainalysis: Ethereum Reorg Triggers THORChain Emergency Pause, Delaying Laundering of Binance Hack Funds Blockchain analytics firm Chainalysis said an Ethereum chain reorganization on the morning of October 31 (EDT) caused THORChain to mistakenly issue a double refund to a user who had deposited 10 ETH, triggering an emergency pause. The pause blocked cross-chain swaps through most of THORChain’s bridges for all users, including North Korean money launderers, inadvertently delaying the laundering of a significant amount of funds stolen from Binance.

    Open source
  2. CO

    Cointelegraph@CointelegraphPost on X ·

    🚨🇰🇵 LATEST: An Ethereum reorg just accidentally jammed North Korea's laundering of stolen Binance funds, after a double refund on a 10 $ETH deposit forced THORChain into an emergency pause, per Chainalysis. https://t.co/5R1IsUEAYN

    Open source
  3. CB

    Crypto BriefingArticle ·

    THORChain pauses operations after Ethereum reorg triggers double refund The incident highlights the vulnerability of cross-chain protocols to blockchain reorgs, impacting their reliability and complicating illicit finance tracking. The post THORChain pauses operations after Ethereum reorg triggers double refund appeared first on Crypto Briefing .

    Open source