THORChain halts operations amid $200M debt and leverage issues

THORChain’s primary investor, TCB, stated on X (formerly Twitter) that the project holds $107 million in liquidity pools and faces two options: allow 5–7% of the fastest creditors to withdraw funds, triggering a death spiral for the platform, or declare bankruptcy and default to gradually repay all creditors while preserving the protocol’s viability.

Investor struggles to keep THORChain afloat

TCB chose the second option and proposed a debt restructuring plan for validators to vote on.“There is no risk of a death spiral; functions have been suspended,” TCB assured platform users, explaining that they previously acted solely as an investor and had no involvement in managing THORChain.

To prevent the platform's collapse, TCB disabled several features, including ThorFi, which allowed users to borrow for short BTC trades—reportedly leading to significant losses.

“Without ThorFi, THORChain would likely rank among the top 10 protocols,” TCB commented, emphasizing that the protocol is currently among the top five in fee generation and has the potential for tenfold growth.

THORChain is indeed a unique project and, for a long time, was the only network enabling non-custodial cross-chain swaps between BTC and ETH using the RUNE token.

However, this functionality has also made THORChain a target for hackers, who used the platform to launder and obscure stolen funds. Additionally, the network itself has suffered significant attacks.

Following the announcement of the suspension, THORChain’s native token, RUNE, dropped by 23%, reaching $2.35.

The FTX cryptocurrency exchange is back in the news after the hackers who breached it converted some of the stolen ETH into BTC. During the conversion, which took place on the decentralized platform THORChain, the attackers exchanged 15,000 ETH worth about $24.75 million, crypto reporter Colin Wu wrote on his X (Twitter) page.

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THORChain halts operations amid $200M debt and leverage issues

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Investor struggles to keep THORChain afloat

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