tether treasury breachTether has been in the news consistently lately, and not for the right reasons. Adding to speculation that Tether could be issuing tokens without backing them 1:1 with US Dollars as they claim to, now there is this. Tether just released a statement confirming that $30,950,010 USDT were removed from the Tether Treasury wallet “through malicious action by an external attacker.”.

It is not as bad as it sounds. They seem to be handling the incident well, and are taking precautions to prevent the stolen tokens from flooding the market.

$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.

The following steps have been taken to address this matter:

  1. The tether.to back-end wallet service has been temporarily suspended. A thorough investigation on the cause of the attack is being undertaken to prevent similar actions in the future.

  2. 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. Accordingly, any and all exchanges, wallets, and other Tether integrators should install this software immediately in order to prevent loss.

  3. We are working with the Omni Foundation to investigate ways that will allow Tether to reclaim stranded tokens and rectify the hard fork created by the above software. Once this protocol enhancement is complete, the Omni Foundation will provide updated binaries for all integrators to install. These builds will supersede the binaries provided above by Tether.to. After the protocol upgrades to the Omni Layer are in place, Tether will reclaim the stolen tokens and return them to treasury.

They continued, saying that issuance of new USDT tokens have not been hampered in any way. Furthermore, all tokens (save the hacked tokens) are still 100% backed by fiat assets.

Tether Coming in Hot with Transparency

Tether has received its fair share of vitriol from the community recently, as they have not been as transparent as the crypto community has grown accustomed to. The community has overwhelmingly been calling for a full audit of Tether’s holdings. Instead, we received a “transparency update” that did not even live up to its title. Tether still has not released banking information corresponding to its holdings, and this does not sit well. Essentially if you hold tether, the money in their treasury belongs to you (or could at a moment’s notice), so it would be nice to know where the capital is being held, for reassurance sake.

In their defense, they have been forthright with this debacle. While the incident does raise questions, it seems that business will continue as usual with minimal consequences. With any luck, this could even motivate the company to release full financials to assuage investor worries that could arise.

a Rafflecopter giveaway

 
The following two tabs change content below.

Creighton Piper

Creighton is a media contributor and Partner with Crypto Answers.