THORChain Faces Criticism Over Bitget Hack Response; Vitalik Buterin Redefines Ethereum

THORChain rejects Bitget's demand to freeze stolen funds

A major dispute has arisen between the cryptocurrency exchange Bitget and the decentralized protocol THORChain. Following a reported hack on Bitget, its CEO demanded that THORChain block specific wallet addresses associated with the theft. THORChain refused this request, stating it cannot censor transactions.

The incident began on September 25 when Bitget reported unauthorized transfers totaling $351.6 million. This figure was later updated to $387.5 million. Bitget's investigation linked the activity to IP addresses connected to VPN services used by a North Korean hacking group. While not definitive proof, Bitget CEO Gracy Chen noted similarities to previous attacks attributed to the same group.

Chen publicly urged THORChain to blacklist the involved addresses, arguing that decentralization should not protect known stolen funds. THORChain declined, leading to a debate within the crypto community about the balance between security and the principles of permissionless networks.

Debate over censorship and protocol control

• Supporters of THORChain argue that blocking addresses sets a dangerous precedent for censorship and undermines the "cypherpunk" ethos of cryptocurrency.
• Critics, including cybersecurity expert Tay Vano, suggest the project is not fully decentralized and accuse it of laundering stolen funds.
• THORChain stated in February 2025 that it had retired its admin key, making it unclear if the protocol technically possesses the ability to blacklist specific addresses.
• Despite the controversy, THORChain's native token, RUNE, rose 50% over the week.

Vitalik Buterin redefines Ethereum's architecture

Ethereum co-founder Vitalik Buterin has published a new vision for the network, describing it as evolving beyond a traditional blockchain. He calls it a "hybrid architecture" that combines blockchains with advanced cryptography, privacy tools, and off-chain computing components.

Buterin stated that Ethereum is now functioning as a "cryptographic world computer." He highlighted plans to integrate zero-knowledge proofs, parallel processing, and post-quantum technology. The upcoming "Hegota" fork, scheduled for next year, is expected to be the last "normal" upgrade before these deeper architectural changes take effect.

Coinbase founder Brian Armstrong and Aave founder Stani Kulechov expressed interest in the update. They noted that this shift allows complex application logic to run outside the main chain while still inheriting Ethereum's security guarantees.

SEC Commissioner Peirce announces resignation

Hester Peirce, a commissioner at the US Securities and Exchange Commission (SEC) known as "Crypto Mom," has formally submitted her resignation. Her departure is effective October 2. In her exit statement, Peirce criticized the current practice of storing large amounts of identity data for Know Your Customer (KYC) checks.

She argued that centralizing ID data creates security risks without improving enforcement. Instead, she advocated for the use of zero-knowledge proofs, a method that allows users to prove eligibility without revealing personal details like names or addresses.

Market movements and regulatory updates

In the broader market, Bitcoin rose 3.8% to $84,222, and Ethereum gained 3.7% to $2,674. The total cryptocurrency market capitalization reached $2.88 trillion. Among altcoins, Quant saw a significant 435% increase, while Falcon Finance dropped 25.3%.

In other news, prediction market platform Kalshi lost an appeal regarding state-level sports betting regulations, potentially setting the stage for a Supreme Court case. Additionally, Tether reported having minimal exposure to a bank where US authorities recently froze $84 million in assets.

What remains uncertain

It is not yet confirmed whether THORChain can technically execute a blacklist command, given its previous retirement of the admin key. The final outcome of the legal battle between Kalshi and state regulators also depends on future court rulings.

Upcoming developments

The Hegota fork on Ethereum is planned for next year. Bitwise has announced a new NEAR ETF expected to list on NYSE Arca under the ticker NRR, though specific launch dates were not provided in the report.

• Cointelegraph