THORChain Sees Wild Explosion in Transaction Volume and Fee Income

In a series of events that has drawn the eyes of the crypto world, THORChain has seen a wild explosion in transaction volume and fee income—all due to a money laundering operation

In a series of events that has drawn the eyes of the crypto world, THORChain has seen a wild explosion in transaction volume and fee income—all due to a money laundering operation associated with a hack on Bybit, one of the major cryptocurrency exchanges.

The hacker who pulled off the Bybit breach has been busy using THORChain to launder his stolen funds, and this copious amount of activity has made its way into the THORChain books. So much so that it has effectively doubled the decentralized exchange’s transaction volume. You’d think this is a pretty good ad for THORChain. Too bad it is all because of the work of a criminal.

Massive Surge in Transaction Volume and Fees

THORChain used to average $80 million in daily transactions before a hacker began to tunnel dirty money through the protocol. On February 22, 2025, the hacker set upon a not uncommon technique in the world of crypto for obscuring the provenance of stolen funds: using a decentralized exchange (in this case, THORChain) to swap the ill-gotten Ethereum for quieter Bitcoin.

In total, THORChain saw a staggering $2.91 billion hit its smart contracts in just five days.

This was obviously a huge amount of not good. What followed was obvious and unavoidable in the context of “decentralized finance”—THORChain began using THORChain to swap otherwise silent Bitcoin for, at a guess, stealthy Ethereum. Remedial measures then had to ensue.

The crypto community is not the only one taking notice of the rapid rise in transaction volume; it has also brought in serious cash for THORChain. The impetus behind all the activity may not be entirely above board, but the decentralized platform is certainly profiting from the upturn in business. The volume translated into income: about $3 million for the almost $3 billion worth of transactions. The money came in the form of fees for executing trades between different cryptocurrencies across THORChain’s decentralized exchange.

Bybit 被盗事件的赢家除了黑客，就是 @THORChain 了：黑客洗钱为 THORChain 带来了 $29.1 亿的交易量跟 $300 万的手续费收入。

Bybit 黑客的主要洗钱方式是通过 @THORChain 将 ETH 兑换成 BTC。这为 THORChain 带来了巨量的交易量跟手续费。同时也带动了 THORChain 的代币 $RUNE 上涨。… https://t.co/952qqgyuoNpic.twitter.com/QV3BPWoDqC

— 余烬 (@EmberCN) February 27, 2025

Although these increased fees benefit THORChain, the transactions’ nature—due to a hack—brings up significant ethical and legal problems. Regardless, THORChain has gained a substantial amount of revenue and is seeing significant user metric increases.

Price Impact on $RUNE

THORChain’s native token, $RUNE, has also been affected by the increase in transaction volume and, with it, handling fees. Demand has surged for $RUNE. Why? Because with platform activity booming, $RUNE has been in demand—driving up its price. Increased usage of a platform often correlates directly with demand for its token. Tokenomics 101.

In this case, the operation led by THORChain laundered a lot of money poured into the THORChain token through Crypto1555 and other backdoor schemers. Illicit activity around THORChain underscores the uptick in THORChain token price. It offers cover to THORChain developers and insiders who benefit every time the token THORChain is hiked. Volatility is not our friend. Long-term, we suspect this is not sustainable.

For THORChain, this may short-term financial success, but it could also bring unwanted regulatory eyes when the platform is already under close watch by regulators concerned its potential role in illegal activities. If involved in a money laundering scheme, and even if it is not intentional, could put THORChain right under the noses of plenty of law enforcement and financial regulators across the world.

This development has shone a light on how illicit actors can use decentralized exchanges like THORChain. Centralized exchanges must follow strict Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations, but decentralized exchanges are often much less regulated. Even this is an understatement because it is not clear that they are regulated at all. The recent Unsolvable Problem hack raises the more general question of how we should regulate all these canyoneering, rapids-rushing, tokencrazy places where money can just disappear.

For THORChain, this involvement raises the crucial issue of whether the platform will suffer any legal or reputational harm. THORChain may not have had the slightest clue that laundering was going on, but it’s still a possible fallout from association with illegal activity. Ignorance on the part of the platform is sometimes, albeit rarely, an effective defense in criminal cases.