Regulators, Hacks, and Pseudo-DeFi Scandals Rattle Crypto Markets

A recent investigation by blockchain sleuth ZachXBT has drawn sharp criticism against several pseudo-decentralized protocols that profited from North Korea-linked exploits, including questionable dealings with THORChain. The report details how these protocols, and specifically THORChain (RUNE) in one instance, generated significant volumes and fees from transactions associated with illicit activities, notably following the high-profile Bybit hack amounting to nearly $1.5 billion. The news has raised concerns about the crypto industry’s security measures and accountability, triggering debates on whether self-regulation is sufficient or if government intervention is inevitable. In response, market observers predict that while well-established assets like Bitcoin (BTC) may benefit from a safe-haven appeal in turbulent times, assets more directly linked to DeFi and riskier practices, such as Ethereum (ETH) and THORChain (RUNE), could face increased volatility and regulatory scrutiny. This mix of short-term panic and long-term reassessment of security protocols underscores the complexity of the current crypto market environment.