Hackers Stole $31M in Tokens from Cryptocurrency Company Tether

Ivan Schwartz
November 22, 2017

He also noted that Tether makes up a very small part of the cryptocurrency market and that problems with Tether "have zero fundamental impact on the health, strength, and security of the Bitcoin network which has been operating successfully since 2009".

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 fast growth of the total cryptocurrencies market capitalization this year has made it harder for investors from Wall Street to ignore these new digital assets.

The company said it's in the process of attempting token recovery so that the stolen funds don't find their way into the broader ecosystem.

According to most recent reports, the company responsible for the cryptocurrency pegged to the dollar, Tether, has recently suffered a major hijacking on their main wallet.

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After this actor sent fractional amounts of BTC to other addresses in what might have been tests to ensure the hack would work, around 10:53 a.m. on November 19, 2017, a series of transactions transferred 30,950,010 USDT and 5 BTC out of Tether's treasury address.

Tether has improved its Omni Core builds that will help to strengthen its software and it is providing it to its community members.

Tether added that the stolen tokens won't be redeemed but will be flagged to prevent the hacker from exchanging them through its service. Again, any tokens from the attacker's address will not be redeemed. We could see a similar situation play out with Tether where the technology itself will eventually be repaired but the reputation of the Tether Foundation may at this point be too damaged by the bad PR associated with this hack to save face for future investors looking to invest their money into digital tokens. The firm plans to release an update of Omni core, its software for partners, in order to lock up the tokens it claims were taken and blacklist the stolen address. This update is meant to prevent the stolen coins from being a part of the system again by locking them into the hacker's wallet.

Several crypto-currency exchanges froze trade in Tether following the announcement, the news site Coindesk reported. For long, there have been allegations on the exchange for using Tether tokens for engaging in fraud and manipulation of funds.

Other reports by GizPress

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