Tether Reports $31 Million Worth Tokens Being Stolen
With cryptocurrencies and digital coins coming into the mainstream, there has been an increasing amount of concern relating to the security of investor-funds and account data. The hacker community is reportedly said to be very active targeting a large number of exchange and wallets used to store the digital coins. In yet another incident of such malicious attacks, cryptocurrency startup ‘Tether’ has recently reported $31 million worth tokens being stolen.
Tether’s cryptocurrency token is called USDT which is pegged to the different fiat currencies like USD, EUR, Yen and allows users to store and instantly transfer token globally. This means that unlike other digital tokens that are subjected to market volatility, Tether prices remain fixed to the fiat currencies while still allowing the user to benefit from the blockchain-based assets.
Tether has confirmed that around $31 million of USDT tokens have been stolen from its wallet “through malicious action by an external attacker.” The detailed statement reads as “$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.”
Taking some quick action, Tether has flagged off all the tokens and will be tracking them in order to prevent the hacker from exchanging them through its services. Additionally, it has also rolled-out an important update on its Omni Core software which will prevent all the stolen coins from being the part of the ecosystem again and will thus lock them into the hacker’s wallet.
Asking all its customers to upgrade the software, Tether said “We are providing new builds of Omni Core to the community. (Omni Core is the software used by Tether integrators to support Omni Layer transactions.) These builds should prevent any movement of the stolen coins from the attacker’s address. We strongly urge all Tether integrators to install this software immediately to prevent the coins from entering the ecosystem. Again, any tokens from the attacker’s address will not be redeemed.”
Soon after the announcement of this news, the market sentiment had soon turned negative with the price of Bitcoin falling over 5.4% to an intraday low of $7,798.73. However, later the price has been again recovered strongly with Bitcoin now trading around $8200. However, the repeated occurrence of such attacks has severely dented the investor-confidence in the security of digital tokens and raises some important questions in this regard.
Last year, a similar such incident took place wherein one of the largest cryptocurrency exchanges - Bitfinex - lost around 119,756 bitcoin tokens which were then worth $72 million. However, there are many who believe that such attempt of hack is an inside job. As reported by Coindesk, the relationship between Bitfinex and Tether has been under severe scrutiny “long-standing allegations the exchange has been using the asset to engage in fraud and market manipulation.” This sparks further suspicion and raises serious questions about the existing hack.
However, ensuring its customers, Tether has issued a statement saying “A thorough investigation on the cause of the attack is being undertaken to prevent similar actions in the future. We appreciate the community’s patience, understanding, and support while we work to rectify the situation.”
It will be interesting to observe the proceeds of this investigation and the resulting outcome of it.