Tether Claims $30 Million in US Dollar Token Stolen

The team behind the stable cryptocurrency Tether is claiming $30 million worth of its funds have been sent to an unauthorized address.

AccessTimeIconNov 21, 2017 at 4:15 a.m. UTC
Updated Sep 13, 2021 at 7:11 a.m. UTC

Tether, the company behind a dollar-pegged cryptocurrency widely used in the market's exchange trade, is claiming that its systems have been hacked and that $30 million worth of its tokens have been stolen.

In a post on the project's website (which has since been removed), Tether blamed a "malicious action by an external attacker" for the theft of $30,950,010 USDT yesterday. Originally launched as Realcoin and later rebranded, Tether aims to serve as a proxy for the US dollar that can be sent between exchanges, notably including Bitfinex, Poloniex and other markets without fiat trading.

In response, Tether said it would move swiftly to ensure these exchanges do not trade or otherwise introduce the stolen funds back into the cryptocurrency economy.

The company wrote:

"$30,950,010 USDT was removed from the Tether Treasury wallet on Nov. 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."

Notably, the company said that it is releasing a new version of the Omni Core software client (which Tether runs on top of) in a bid to effectively lock up the tokens it alleges were stolen. Should nodes in the network adopt the software, it would effectively blacklist the stolen address, enacting an emergency fork to contain the funds.

Representatives from the Omni Core software project said they would seek to release new software in the coming days that will allow Tether to retrieve the stolen tokens.

Observers online spotted the move earlier today, stoking speculation about the nature of the freeze.

"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," Tether wrote.

The announcement comes amid a period of growing discussion – and controversy – around Tether.

Under scrutiny has been the unclear relationship between Tether and the troubled British Virgin Islands-based bitcoin exchange Bitfinex – and long-standing allegations the exchange has been using the asset to engage in fraud and market manipulation. Complicating matters is that the two companies are said to share a common ownership, though details remain murky as to the exact nature of the connection.

As such, today’s hack claims are likely to further drive the controversy, which began following Bifinex's hack last August, in which it lost more than $70 million in customer funds.

Following the news, other exchanges that offer order-book trading on Tether have taken steps to freeze trading, with China-based Huobi and OKCoin announcing the move shortly after the post.

CoinDesk will continue to monitor this developing story.

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