Change online 6 days after THOR stops receiving FTX funds

Decentralized exchange (DEX) THORSwap has resumed operations after briefly going into maintenance mode due to the discovery of illegal funds on its platform.

THORSwap took to X (formerly Twitter) on October 12th to announce that the forum is back online. The platform asks users to continue regularly scheduled exchanges of more than 5,500 assets across 10 blockchains from their own wallets.

The protocol halted exchanges on the platform as early as October 6 as a quick measure to prevent illegal funding activity. THORSwap acknowledges that its DEX platform has experienced illegal use and has decided to pause to find a permanent solution to the abuse.

According to the latest announcement, THORSwap hasn't made any major changes to the platform except for a “shiny new terms of service”.

Updated on October 11, THORSwap's new terms of service read that users must comply with applicable laws such as anti-money laundering and agree not to engage in or assist in any activity that violates sanctions programs or involves any illegal money laundering. The updated terms state that THORSwap reserves the right to restrict users from using the platform in the event of violations:

“THORSwap reserves the right to terminate the THORSwap Services at any time without notice for any reason, including without limitation breach of these Terms.”

The cryptocurrency community has expressed outrage over THORSwap's updated terms of use, with many questioning the “decentralized” nature of the platform in the context of the new rules, which appear to be on a centralized exchange.

“Is there any reason to use your services instead of regular CEX? Did you just copy-paste their terms of service?” asked one X user.

According to Eric Voorhees, founder of ShapeShift, THORSwap differs from THORChain – the network it's built on – in terms of centralization. THORSwap is “a centralized company that makes decisions on their own interface”, while THORChain is decentralized.

You are referring to Torswap, which is not a torch.

The former is a central company that makes decisions about their own interface.

The latter is a decentralized protocol that has no censorship and can be accessed in many ways.

— Erik Voorhees (@ErikVoorhees) October 12, 2023

In addition to updating its terms of service, THORSwap says it has partnered with an “industry leader” to put in some extra safeguards to prevent money laundering. The protocol may still need to “fix things in the coming days,” the announcement added.

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THORSwap's return came on the same day blockchain analytics firm Elliptic reported that the hacker of the now-defunct crypto exchange FTX began moving the stolen funds in late September 2023. The transactions are the first time those funds have moved since the attack.

According to Elliptic, an anonymous hacker used THORSwap to convert 72,500 Ether (ETH), or about $120,000 million, into Bitcoin (BTC).

In a statement to Cointelegraph, a THORSwap spokesperson stressed that FTX exploits can be easily accessed after conversion to BTC. But cryptocurrencies cannot be viewed after passing through the mixer.

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