A significant custody breach is playing out in public this week, and the response from one major protocol has drawn sharp attention. According to CoinDesk, THORChain — a decentralized cross-chain swap protocol — has rejected an urgent request from crypto exchange Bitget to block addresses connected to last week's $387.5 million hack. Researchers tracked 27 successful swaps that moved approximately 2,390 ETH into 75.2 BTC, even as Bitget pressed THORChain to act.
The exchange itself is recovering slowly. Cointelegraph reports that Bitget has resumed Bitcoin withdrawals following the breach, with Ether withdrawals scheduled to return Tuesday and USDT on Wednesday. The sequential restoration of services signals the scale of the operational disruption — a breach this size doesn't resolve overnight.
THORChain's refusal to intervene is not surprising to those who follow its governance design. The protocol operates without a central authority that can freeze transactions, a feature its builders frame as a strength. Critics argue that this makes it a reliable laundering rail for bad actors. Neither framing is entirely wrong. Decentralization has real tradeoffs, and this incident puts them in unusually stark relief.
What This Means for Bitcoin Custody
When stolen funds land in Bitcoin, recovery becomes functionally impossible without cooperation from miners, exchanges, or custodians downstream. None of that cooperation is guaranteed. This case is a reminder that how funds move into Bitcoin matters as much as how they're held once there. For exchanges, custodians, and individual holders alike, the weakest point in a security chain is often not the Bitcoin layer itself — it's the bridges, swap protocols, and access credentials that surround it.
Bitget has not publicly identified the attacker or disclosed the exploit vector. That silence is notable. Users and counterparties are left to assess risk without the information they'd need to do so properly.
ETFs Had a Strong Week — Then Pulled Back
Separate from the hack, Bitcoin ETFs posted their largest weekly inflow since October 2025 — $2.4 billion over seven sessions, according to both Cointelegraph and The Block. Year-to-date flows turned positive for the first time in months, reversing roughly $5.8 billion in net outflows recorded just two months ago. The momentum slowed, however, as Bitcoin slipped back below $83,000 to open this week.
The pullback has a geopolitical driver. President Trump declined to rule out additional strikes on Iran over the weekend, according to CoinDesk, sending Bitcoin and Nasdaq futures lower together on Monday morning. Oil climbed back above $100 a barrel. Traders appear to be pricing in continued uncertainty ahead of this week's inflation and jobs data.
Strategy Adds More Bitcoin
Michael Saylor's firm Strategy made another purchase last week — 1,665 BTC for approximately $143 million, funded partly by selling 1.47 million MSTR shares, according to Cointelegraph and Decrypt. Total holdings now stand at 847,666 BTC, representing roughly 4% of the total 21 million supply cap. The purchase set a new holdings record for the firm.
- THORChain refused Bitget's request to block hacker addresses tied to a $388M theft
- Bitget is restoring withdrawals in phases after last week's breach
- Bitcoin ETFs logged $2.4B in weekly inflows — their best week since October 2025
- Strategy now holds 847,666 BTC after a $143M purchase
When funds move through open protocols and into Bitcoin, the transparency of the blockchain can help investigators trace them — but stopping transfers is another matter entirely. For charities that accept Bitcoin donations, that same transparency works in their favor: every gift is publicly verifiable, and funds go directly where donors intend.