decrypt.co
RUNE, the native token of THORChain, saw a staggering 10.5% overnight rise as the project resumed trading on its leading exchange THORSwap.
THORSwap suspended trading last Friday after illicit funds linked to the FTX exploit in November 2022 were allegedly passed through the exchange.
Services such as lending, borrowing, and staking actions remained operational.
THORSwap uses the assets deposited on THORChain, a layer-1 blockchain optimized for interoperability between various blockchains, as liquidity to facilitate cross-chain swaps.
The exchange resumed trading yesterday with an update to its “terms of service,” adding “some extra guardrails” to prevent the flow of illicit funds and have legal compliance.
Still, RUNE had been in a downtrend since THORSwap’s trading suspension, dropping 27% over the week from $2.03 to lows of $1.48 right before the positive reversal took place yesterday.
The governance token of THORSwap, THOR, also rose by 11.5% following the announcement.
The trading volumes via THORChain jumped to $62 million on Thursday after falling below $30 million over the last couple of days, per data from THORChain Explorer.
Thorswap blocks sanctioned countries
In addition to blockchain illicit funds, the THORSwap team also updated its terms of service to block users from countries sanctioned by the U.S.
The protocol’s team announced that it has “partnered with an industry leader” to add the guardrails.
Uniswap, a decentralized exchange on Ethereum, uses a similar guardrail to identify financial crime. The leading DEX partnered with sleuthing firm TRM Labs in April 2022 to analyze and block transactions that are likely linked to illicit activity.
Some users were quick to raise concerns about the new rules, saying it contradicts the principle of decentralization.
Matt Ahlborg, a crypto researcher, replied to THORSwap saying that blanket bans are unethical because they adversely affect “hundreds of millions of innocent people.”
To which, a THORChain supporter replied that there are other applications that users from sanctioned countries can use instead of THORSwap, as it's built by “an American team” and “have to legally comply.”