Thorchain vs Bitget: Moral Stand or Decentralized Nonsense?

The crypto industry is embroiled in a growing debate after Bitget and THORChain clashed over how decentralized protocols should handle stolen crypto moving through their infrastructure.

The dispute began when Bitget asked the privacy-focused THORChain to block addresses linked to the attackers behind its recent hack. THORChain refused, citing its permissionless design.

That response highlighted a difficult challenge for the crypto industry, sparking a bigger debate: Should decentralized networks prioritize their principles, or their responsibility to the people who use them? To understand both sides, let’s look at the genesis of the dispute.

The Bitget Breach and Its Request

On September 24, the Bitget exchange suffered a security breach that led to the loss of over $387 million. According to the company, the attackers targeted its internal wallet systems, not users’ private keys. They compromised the systems that approve transactions, making fake withdrawals look legitimate.

The affected funds came from Bitget’s hot and warm wallets, which the exchange uses to manage liquidity and withdrawals.

In response to the breach, Bitget took several measures to contain the situation and reassure users. One of these was a public request for THORChain to block addresses linked to the attackers. The goal was to prevent them from moving the stolen funds through its network.

Bitget CEO Gracy Chen made the exchange’s position clear, stating:

“Decentralization is a design principle, not a shield for facilitating known stolen funds.”

Why THORChain Refused

THORChain, however, took a different position. It expressed sympathy for those affected but emphasized its decentralized and permissionless design. It further compared its model to Bitcoin, Ethereum, and BNB Chain.

For context, THORChain is a decentralized cross-chain protocol that allows users to swap native assets across different blockchains. It does this without relying on a centralized exchange or intermediary. Users can make swaps without creating accounts or seeking approval from a central authority.

This design is central to THORChain’s response. The protocol maintains that selectively blocking individual addresses conflicts with its permissionless design. It also raises questions about who should decide which users can access decentralized networks.

However, this does not mean THORChain has no emergency controls. The protocol can halt activity when its own infrastructure faces a serious threat. It can also restrict activity involving a particular chain.

But THORChain sees this as different from blocking an address at Bitget’s request. In its view, protecting the network is different from policing every transaction.

That distinction sits at the heart of the controversy. Should a permissionless protocol intervene when stolen funds pass through its network? Or would doing so undermine the principles that make it decentralized?

The answer remains contested.

Industry Figures Weigh In

THORChain’s response did not sit well with everyone in the industry. It quickly sparked a wider debate about what decentralization should mean in practice.

Several industry figures criticized the protocol’s position. Among them was OKX CEO Star Xu, who questioned THORChain’s claim of being fully decentralized.

Xu pointed to a previous incident in May when THORChain halted its network after an attack affected its own infrastructure. According to Xu, node operators paused the network within minutes. The network remained offline for about 13 hours.

For Xu, this raised a clear question. If THORChain can stop the network when its own funds are at risk, why not when someone else’s funds are at risk?

He also drew a distinction between THORChain and Bitcoin. Bitcoin cannot be stopped by a central authority. THORChain, he argued, has the ability to halt its network when necessary.

Based on this, Xu questioned THORChain’s decision to compare itself with Bitcoin. He argued that the two networks differ in how they can respond to such situations.

False!

THORChain effectively proved that it is not truly decentralized. In May, when its own vaults were drained, node operators paused the entire network within minutes and kept it offline for 13 hours.

A network that can stop when its own funds are at risk, but refuses to do… https://t.co/tGY5wfWZwU

— Star_OKX (@star_okx) September 27, 2026

The criticism also brought an older controversy back into the spotlight. During the 2025 Bybit hack, THORChain faced similar criticism. The protocol processed transactions involving funds linked to the attackers.

On the other side, many supported the THORChain decision. One market participant compared blaming THORChain for stolen funds to blaming concrete when a child trips. Others made a similar argument. They described THORChain as a neutral tool, like Bitcoin or Ethereum.

Their view is that criminals using a protocol do not make the protocol responsible for their actions. They also argued that shutting down the network would affect legitimate users alongside criminals.

In contrast to THORChain, some industry partners helped freeze parts of the stolen funds. NEAR Intents disclosed that it flagged more than $50 million in attempted laundering flows. It also froze $503,000 during execution. The platform also waived its own share of the recovery bounty to help maximize the funds recovered. Stablecoin issuers Circle and Tether also froze $318,000 linked to the Bitget hack.

Final Thoughts 

The Bitget-THORChain episode revives a tension in the crypto scene that is impossible to ignore. Intervention can help protect victims and stop stolen funds from moving further. But it can also create room for discretionary control and censorship.

On the other hand, strict neutrality protects permissionless systems. Yet it can leave them indifferent to the origin of the funds they process.

Well, neither approach is without consequences.

Intervention puts human judgment above code. Refusing to intervene shows that criminals can exploit the same systems built to keep crypto open.

Therefore, the bigger question is no longer whether crypto can remain permissionless. It is whether decentralized networks should prioritize their principles or their responsibility to the people who use them.

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