Tether’s bizarre recent history continues as developers report a hack worth over $30 million at market value.
Tether: Huge Losses Counter Huge Issuance
Following several weeks of increased issuance of Tether’s token USDT, which notionally acts as a US dollar replacement, a “malicious action” has removed almost 31 million from its Treasury wallet.
“…We discovered that funds were improperly removed from the Tether treasury wallet through malicious action by an external attacker,” an announcement read Monday after the attack became apparent November 19.
The events cap a highly volatile period in the history of USDT. A huge uptick in the number of tokens being released – 50 million in the first week of November alone – is now considered the cause of recent increases in Bitcoin (BTC) prices, which now stand at over $8000.
Investment fluctuations around Bitcoin Cash (BCH) added to the confusion, while two rounds of millions of USDT creation saw BTC jump over 30% in two weeks.
Quarantining Tokens Means ‘Temporary Hard Fork’
The total “stolen” from the project is over 1.5 times the amount of the most recent token release. Tether already has a contingency plan in place, which will ‘flag’ USDT in the hacker’s possession and prevent them converting to USD.
“$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 announcement continues.
This process involves the release of a new version of Tether’s Omni Core software, which every client must upgrade to to prevent spending of the stolen funds.
“…This software will cause a consensus change to currently running Omni Core clients, meaning that it is effectively a temporary hard fork to the Omni Layer,” developers note.
Despite being known for its fluctuations around the $1 mark, USDT was trading only $0.005 below parity at press time Tuesday.
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