Today, two newly created wallets sold 14,064 Ethereum ($ETH) for 27.5 million $DAI using decentralized finance (DeFi) platforms THORChain and Chainflip. These transactions have aroused suspicions of money laundering.
Suspicious $ETH Transactions
Blockchain analytics firm Spot On Chain reported in a recent tweet that 14,064 $ETH were sold at an average price of $1,959. The transactions, carried out through DeFi platforms THORChain and Chainflip, have sparked allegations of money laundering due to the fresh origin of the $ETH obtained through these protocols.
Hacker Attacks and DeFi Platforms
This incident occurs against the backdrop of increased scrutiny on DeFi platforms after North Korean hackers had used platforms like THORChain and Chainflip to launder stolen funds from the $1.4 billion Bybit hack. These hackers, believed to be the notorious Lazarus Group, have reportedly converted at least $300 million of the stolen funds into unrecoverable assets.
Combating Illicit Fund Flows
Efforts to curb such illicit activities face significant challenges. Chainflip has partnered with crypto security firm Elliptic to block addresses associated with North Korea from accessing its front end. However, THORChain operates without an official front end. Despite measures, the Lazarus Group has proven adept at bypassing restrictions by interacting directly with protocol code or using third-party front ends, which has allowed them to continue laundering substantial sums.
The implications of this incident underscore the ongoing tension within the DeFi ecosystem. Platforms like Chainflip and THORChain are taking steps to prevent illicit use, but experts warn such measures risk undermining the core principle of permissionlessness that defines DeFi.
