How 188 Stolen BTC Moved from Coinbase to THORChain Swaps

Tension rises between centralized and decentralized finance as accusations surface over a recent Coinbase breach.

ZachXBT alleges that more than 188 Bitcoin (BTC) stolen from users in the Coinbase breach were exchanged for ETH using the permissionless protocol THORChain.

The controversy intensified when blockchain investigator ZachXBT claimed on X (Twitter) that BTC involved in the Coinbase incident had been swapped for ETH via THORChain. ZachXBT stated:

“You do realize all of the BTC originates from one of the Coinbase user thefts from the Coinbase breach right?” ZachXBT asked THORChain.

This public accusation placed THORChain at the center of debate. Moreover, ZachXBT claims that the threat actor trolled him via an on-chain message.

“The threat actor who stole $300 million+ from Coinbase users by paying customer support just began trolling me onchain with this message after swapping $42.5 million+ from BTC to ETH via Thorchain today,” ZachXBT wrote on his Telegram channel.

The THORChain developer community and prominent users dispute the idea that permissionless protocols should be blamed for misuse. They argue the platform processes all transactions equally. According to them, responsibility lies with Coinbase and compromised user security at centralized exchanges.

One developer, JP, expressed this view on X.

“Once the BTC hits the chain it’s “just BTC” and THORChain should have no regard for where and how it came from. Stop trying to make BTC non-fungible,” JP stated.

Supporters reiterate that decentralized protocols exist to enable permissionless swaps, not to assess fund origins. For many, the incident emphasizes differences between centralized vulnerabilities and the impartial processing in DeFi.

Debate continues over whether THORChain should celebrate large transaction volumes if some stem from questionable sources. A leading voice on X differentiated appreciation of the platform’s infrastructure from support for illicit activity, stating:

“I don’t think ZachXBT is calling THORChain to censor. But he is calling the THORChain community to NOT celebrate large swaps from exploiters. I know NONE in the community who celebrates exploiters. NONE. Instead, they are celebrating the existence of infra which can process such large swaps, in a decentralized and permissionless way,” X user SamYap said.