Today, Tether, a company that allows cryptocurrency exchanges to convert fiat money into tokens, announced the theft of $31 million worth of tokens.
In its statement, the company said that on November 19th, a “malicious” attacker removed the tokens from Tether’s Treasury wallet and sent them to an unauthorized Bitcoin wallet. The attacker moved $30,950,010 worth of USDT, Tether’s cryptocurrency asset that it backs with the US dollar.
According to the official statement: “Yesterday, we discovered that funds were improperly removed from the Tether treasury wallet through malicious action by an external attacker. $30,950,010 USDT was removed from the Tether Treasury wallet on November 19, 2017, and sent to an unauthorized bitcoin address. As Tether is the issuer of the USDT managed asset, we will not redeem any of the stolen tokens, and we are in the process of attempting token recovery to prevent them from entering the broader ecosystem.”
In response, Tether assured clients that it is working towards flagging and recovering the stolen tokens. The attacker will not be able to trade or use the flagged tokens in the cryptocurrency ecosystem.
Market Trading Ideas for May 10-14Go to article >>
The company also temporarily suspended the back-end wallet service for its partners. It said that it will initiate an investigation of the incident and will soon roll out an update to its Omni core software client (the base software of the token). This will ultimately prevent the recirculation of the stolen tokens into the crypto economy and lock them up in the attacker’s wallet.
Tether’s response to the attack also attracted a lot of criticism from many industry experts. Emin Gun Sirer, a professor in Cornell University, wrote: “Tether quietly did a hard fork to blacklist a specific address and freeze funds. Three questions: 1. Who controls the Omni ledger and who can perform these kinds of operations? 2. Why was this address blacklisted? 3. Which other addresses are next in line?”
On the lack of transparency on the matter, Tim Swanson, founder of Of Numbers and PostOakLabs, said: “Earlier today Tether blacklisted a specific address. That address has $31m in Tether USDT their explorer has been down all day. Does this mean that law enforcement are looking into their non-transparent operations?”
According to Coinmarketcap.com, Tether is the 20th most valuable digital coin with a market cap of over $674 million.
Amid Tether’s hack, the soaring Bitcoin took a plunge from above $8250 to $7800 but was quick to recover due to the high market demand.