THORSwap is a DEX that runs on the THORChain platform. The price of its native token THOR has dropped dramatically following a recent incident involving illegal fund transfers.
The THORSwap token price is down by 56.5% in just the last month. Losses of 36.9% have been recorded over the two most recent weeks.
The downturn persists despite THORSwap’s attempts to reestablish user trust by implementing strict security measures, and introducing innovative features such as an integrated wallet.
Stopping operations
THORSwap paused its operations on October 6, 2024 after detecting suspicious transaction tied to the funds stolen from FTX.
Elliptic, a blockchain analytics company, reported an anonymous hacker associated with the now-defunct FTX cryptocurrency exchange used THORSwap in order to convert approximately $120,000,000 worth of Ether (ETH), or 72,500 Ethers (ETH), into Bitcoin (BTC) at that time.
After the conversion, money was funneled through cryptocurrency mixers that were sanctioned, making it harder to trace.
The crypto community was concerned by this movement, which led THORSwap temporarily to suspend the platform. It then entered what they called “maintenance” mode.
THORChads: A recent and pressing concern was raised regarding the possible movement of illegal funds via THORChain, and specifically THORSwap. These activities are not allowed on the THORSwap Platform, and THORSwap is against all forms of criminal activity.
It was not a decision taken lightly.
Before taking any action to stop misuse, THORSwap sought legal and law-enforcement advisors.
THORSwap is now back in business
THORSwap will resume its service on October 12th, 2024 after six days of maintenance. It has developed enhanced security protocols in cooperation with an “industry-leader” who cannot be named, in accordance with AML regulations.
Through a posting on X, THORSwap stated that they had worked with their new partner closely to improve the address screening protocol, and to add “guardrails”, to stop the flow of illegal funds.
Users are explicitly required to adhere to AML regulations in the updated Terms of Service, which was released on October 11. They also cannot engage in any activities that could violate sanctions.
THORSwap restricts access for users from countries that are under US, UK and EU sanctions, such as Myanmar, Cuba and Iran.
THORSwap has now changed its terms to allow it to close any account immediately if there are violations. This is to avoid future mishaps like the FTX misuse.
Despite the proactive measures, some users have questioned whether the updates are more in line with operating principles used by centralized exchanges.
Erik Voorhees of ShapeShift clarified, notably, that THORSwap is a centralized firm, even though it was built on a decentralized THORChain. Its interface decisions are made by this company.
Responding to @LastCoinStandng
Thorswap is the name you’re using, not Thorchain. It’s a centralized company who decided on their interface. It is decentralized and doesn’t have any censorship.
Exodus’ Passkeys Wallet integration
THORSwap, while navigating through these challenges introduced a feature that appealed to new crypto users as well as experienced ones.
Exodus Passkeys Wallet was integrated into the platform on October 14. This multi-chain wallet offers increased security via Multi-Party Computation and biometrics.
Passkeys Wallet allows users to manage their wallets on THORSwap directly without the need for browser extensions or traditional seed phrases.
The software supports multiple blockchains including Bitcoin, Ethereum BNB Smart Chain and Arbitrum. Users can seamlessly swap between them.
The price of THORSwap remains bearish
Despite THORSwap resolving an issue with illicit funds moving on their platform, and even integrating Passkey Wallet for multi-chain access, the price THORSwap remains in a downward trend, with a 24-hour shift of -23.4 % and a seven-day move of -33.8 %.
The new upgrades to THORSwap’s security and experience underscore the platform’s dedication to integrity and accessibility. However, the impact of the illegal fund scandal continues to have a negative effect on THOR’s value.
It remains to be determined whether the DEX will succeed in restoring investor confidence and stabilizing the THORSwap Token Price.
THORSwap, with its evolving policies and technology advancements, is a platform that strives for resilience in the face of uncertainty.
As new information becomes available, the post THORSwap token prices drop amid concerns about illicit funds movement may be updated.
