Tether Claims a Hacker Stole $31 Million in Tokens

| Updated
by Bhushan Akolkar · 3 min read
Tether Claims a Hacker Stole $31 Million in Tokens
Photo: Tether

Startup Tether is the fresh victim of online malicious attacks reporting tokens worth $31 million being stolen from its wallet.

Online hackers have turned a lot sharper and active ever since the cryptocurrency boom has stormed the financial markets. With increasing participation of a large number of investors, there has also been increasing threats with hackers constantly targeting investor profiles and wallets. Cryptocurrency exchanges have been constantly fighting this war with the hacker community in order to keep their customer data and currency tokens safe and secured.

In what comes as one of the biggest shocks to the cryptocurrency community is that startup Tether – who helps exchanges to convert fiat currencies into tokens – has reported a theft of $31 million worth of tokens. The startup has confirmed in a statement that some “malicious” attacker has stolen tokens from the Tether Treasury on Nov 19th and sent them to some unknown and unauthorized Bitcoin address.

“$30,950,010 USDT was removed from the Tether treasury wallet on 19 November 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,” said Tether.

The team at Tether is actively working to solve this issue and has reportedly flagged all those tokens. This will allow the team to track all the flagged tokens and preventing any attempt made by the hacker for exchanging them through its services. Tether is also said to have suspended the back-end wallet service for its partners. It is also planning to roll-out an update to Omni Core – Tether’s software for partners – that will prevent all the stolen coins from being recirculated within its system and will lock all of them into hacker’s alleged wallet.

Clarifying on this, Tether said “Tether issuances have not been affected by this attack, and all Tether tokens remain fully backed by assets in the Tether reserve. The only tokens that will not be redeemed are the ones that were stolen from Tether treasury yesterday. Those tokens will be returned to treasury once the Omni Layer protocol enhancements are in place.”

This incident is much likely to raise questions about the suspicious and unclear relationship between popular Bitcoin exchange Bitfinex and Tether. For long, there have been allegations on the exchange for using Tether tokens for engaging in fraud and manipulation of funds. This incident is also likely to raise further raise questions regarding the controversy surrounding Bitfinex’s hack back in August which reported a casualty of customers funds worth $70 million.

Following this news, the cryptocurrency market mood was soon gripped with pessimism as even Bitcoin prices fell by over 5% before recovering back to the current value of $8200.21 according to CoinMarketCap. All such incidents raise serious questions as to how to combat such online thefts and how vulnerable are several exchanges and platforms which stores huge sums of investor money with them. Such incidents serious give a big jolt to the investor confidence and spark of debate within financial corridors about how secured are the digital coins.

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