Exchanges Suspend USDT Transactions After $30 Million Tether Treasury Wallet Hack

The company behind the controversial Tether altcoin has revealed a few hours ago that it suffered a cyber attack in which the alleged hacker made off with over $30 million worth of USDT. The company also announced some steps to rectify the situation, including one that is effectively a temporary hard fork, leading exchanges to suspend USDT transactions.

Also Read: The Controversy Surrounding Tether’s USD “Backing” Continues

The critical announcement issued by the Tether team explains that: “Yesterday, we discovered that funds were improperly removed from the Tether treasury wallet through malicious action by an external attacker. $30,950,010 USDT was removed from the Tether Treasury wallet on November 19, 2017 and sent to an unauthorized bitcoin address.”

As the issuer of the USDT, Tether warns the hacker or anyone that might be working with him that: “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.”

Emergency Fork

 Exchanges Suspend USDT Transactions After $30 Million Tether Treasury Wallet Hack The company lists its next steps to deal with the matter and calls on Tether integrators to support its actions to prevent further ecosystem disruption. These include temporarily suspending the back-end wallet service, opening an investigation to find the cause of the attack to prevent similar actions in the future and do an emergency hard fork.

The team explains that they are providing new builds of Omni Core, the software used by Tether integrators to support transactions, that should prevent any movement of the stolen coins from the attacker’s address. This will cause a consensus change to currently running clients, “meaning that it is effectively a temporary hard fork.”

Nothing to worry about?

 Exchanges Suspend USDT Transactions After $30 Million Tether Treasury Wallet Hack Finally, they try to reassure users that they are working on finding ways to allow Tether to reclaim the stranded tokens and rectify the hard fork. The company also adds that “Tether issuances have not been affected by this attack, and all Tether tokens remain fully backed by assets in the Tether reserve.”

In response to these developments some exchanges have notified their traders that they are suspending USDT transactions. Huobi.Pro and fellow Asian venue OKEx for example have both announced that: “In order to ensure safety, with immediate effect, we would suspend the USDT deposit as well as the withdrawal services.” Tether trading is particularity important for platforms that don’t want to seem as if they are offering crypto/fiat pairs (in places where this can be a sensitive matter, like China), using USDT as a proxy for the dollar instead.

How do you think USDT will be effected by this going forward? Share your thoughts in the comments section below!

Images courtesy of Shutterstock

Tags in this story
altcoin, Cyber Attack, Fork, Hack, N-Technology, Thether, USDT, Wallet

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Avi Mizrahi

An economist and financial writer, Avi has been covering Bitcoin since 2013. Routinely talks about the promise of cryptocurrency at conferences around the world.

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