1. Lazarus launders over $240 million through THORChain, chief developer forced to resign.
Lazarus, a well-known hacking group associated with the North Korean government, is reported to have laundered over $240 million of illegal cryptocurrency funds through the decentralized cross-chain liquidity protocol THORChain. Lazarus is known for its sophisticated cryptocurrency theft techniques, utilizing THORChain's trustless mechanism to convert stolen funds into other digital assets, thereby reducing the feasibility of tracing the funds.
THORChain supports intermediary-free asset exchanges between different blockchain networks, enhancing user autonomy but also providing opportunities for malicious actors to launder money. The resignation of the chief developer reflects immense pressure from the community or external sources, and this move may be intended to quell public doubts about the protocol's trustworthiness. However, this leadership change brings uncertainty to the project's long-term governance and operational stability.
To mitigate future risks, THORChain may consider implementing stricter 'Know Your Customer' (KYC) or Anti-Money Laundering (AML) measures. However, such initiatives may conflict with its decentralized philosophy or lead to user attrition. If trust issues are not effectively resolved, liquidity providers and users may diminish, threatening the sustainable development of the protocol's ecosystem.
2. Grayscale's GBTC saw a net outflow of $7.3 million yesterday, while ETHE had a net outflow of $19.6 million.
Grayscale Investments, a leading provider of cryptocurrency investment tools, reported a net outflow of $7.3 million from its Bitcoin Trust (GBTC) yesterday, and a net outflow of $19.6 million from its Ethereum Trust (ETHE). These outflows indicate a weakening investor confidence, possibly influenced by broader market factors.
Factors such as macroeconomic uncertainty, rising interest rates, or increased regulatory pressure may prompt institutional investors to reduce their allocation to digital assets. The outflow from ETHE is significantly higher than that from GBTC, which may reflect market concerns about a slowdown in the development of the Ethereum ecosystem or increased competition among Layer 2 solutions.
If Grayscale's efforts to convert its trust products into exchange-traded funds (ETFs) continue to be hindered or make no progress, the attractiveness of its trust products may decline further. The sustainability of the outflows will become an important indicator of institutional confidence in the cryptocurrency market.
3. Bybit hackers successfully launder 50% of stolen ETH through THORChain, converting it to BTC.
Bybit exchange hackers have converted about 50% of the stolen Ethereum (ETH) into Bitcoin (BTC) through THORChain's cross-chain functionality, successfully concealing part of the fund's flow. This incident highlights that while THORChain serves as a legitimate cross-chain liquidity tool, it has also become a preferred channel for hackers to launder money.
Decentralized protocols lack centralized control and mandatory KYC measures, making it difficult to track and prevent such money laundering activities. The current regulatory framework has limited constraints on decentralized projects, exposing regulatory loopholes. This incident may undermine Bybit users' trust in its security while increasing regulatory pressure on THORChain.
4. Uniswap collaborates with Robinhood to launch a native fiat withdrawal feature
Leading decentralized exchange (DEX) Uniswap has partnered with Robinhood and other institutions to launch a native fiat withdrawal feature. This initiative marks an important advancement in the integration of decentralized finance (DeFi) and traditional finance (TradFi), addressing the pain point for users converting on-chain assets into fiat currency in their bank accounts.
By leveraging Robinhood as a bridge between traditional finance and cryptocurrency, Uniswap has gained a strong user base and fiat processing capability. This collaboration lowers the entry barrier for non-crypto native users, expanding Uniswap's market coverage. One of the core advantages of centralized exchanges (CEX) is the fiat trading channel, and Uniswap is gradually narrowing this gap, enhancing its competitiveness in the DEX market.
If this feature operates smoothly, it may encourage other DeFi protocols to follow suit and launch similar fiat gateways, thereby promoting the popularization and mainstream acceptance of decentralized financial services.
