Blockchain Data Links Tether 'Attack' to 2015 Exchange Hack

The individual or group behind the alleged Tether attack may have been involved in a previous well-known hack in the bitcoin space.

AccessTimeIconNov 21, 2017 at 8:00 p.m. UTC
Updated Sep 13, 2021 at 7:11 a.m. UTC

Those behind the alleged theft of $31 million worth of Tether's US dollar-backed tokens were also involved in a high-profile hack two years ago, a cybersleuth has concluded from available blockchain data.

The company behind the dollar-backed cryptocurrency tether claimed Monday night that it had been robbed, sparking a new wave of speculation around the token, its backers and its alleged role in recent bitcoin market movements.

And, as might be expected, the availability of public blockchain data for the transactions involved led a number of observers online to trace them back in an attempt to find answers.

In posts on the r/bitcoin and r/cryptocurrency subreddits, a user going by the handle SpeedflyChris has linked the alleged Tether attack to the $5 million hack of Bitstamp in 2015. As reported at the time, employees at that Luxembourg-based bitcoin exchange fell victim to a weeks-long phishing attempt, ultimately leading to the loss of some 18,000 bitcoins.

At the heart of SpeedflyChris' analysis is this wallet, for which transactions from Bitstamp can be seen dating back to January 2015.

As SpeedflyChris notes, the address in question was used to send bitcoins to another address that later received tokens from Tether's "treasury" wallet, in a series of 21 transactions over the course of Nov. 19. Included in the alleged theft of the roughly $31 million in tethers was 5 BTC, which ended up in three separate wallets as Tether uses Omni, a bitcoin-based software protocol to effectively "tag" coins to serve different purposes.

Separately, SpeedlyChris' analysis indicates that the primary address in question is also connected to thefts that occurred at the China-based bitcoin exchange Huobi in 2015, as well as a number of transactions to peer-to-peer bitcoin exchange LocalBitcoins.

What now?

Despite the pseudonymous nature of public blockchains like bitcoin, the data offers a level of transparency into the movements of the funds involved.

Yet the absence of identifying information beyond wallet addresses means that online sleuthing has its limitations.

On the other hand, in the event of a law enforcement investigation, such data could ultimately come into play.

Magnifying glass image via Shutterstock

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
First Mover Asia: Remember ICOs? You Would Have Made a Fortune if You HODLed; Bitcoin Slogs Toward $20K

Investors who purchased a breadbasket of blue chip coin offerings about five years ago would have generated an 819% return, even with the current bear market; most cryptos fell in Tuesday trading.

CoinDesk - Unknown
2
CoinDesk - Unknown
Compass Mining Seen Losing Maine Facility After Failing to Pay Power Bill

The most valuable crypto stories for Tuesday, June 28, 2022.

CoinDesk - Unknown
3
CoinDesk - Unknown
Crypto Jobs: Who’s Cutting and Hiring?

A running reckoning to layoffs and hirings in the cryptocurrency/blockchain industry.

CoinDesk - Unknown
4
CoinDesk - Unknown
Governments May Restrict Foreign Access to Their CBDCs, Riksbank Official Says

Not all countries “play nicely” with each other, complicating how central bank digital currencies will interact with other payment systems, said Cecilia Skingsley, first deputy governor at the Swedish central bank.

CoinDesk - Unknown