Tether, the company behind the dollar-valued digital currency used in place of cash on many exchanges, claims it's been hacked.

Quite possibly by the same group that hacked Bitstamp in 2015.

Here we go ... we'll have to dig up the flowchart.

The anatomy of the alleged "hack"


Tether claims a "malicious action by an external attacker" was banned for stealing $30,950,010 USDT and stated that it would move to ensure exchanges do not trade the stolen funds.

"$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."

They plan on a hard fork of the Omni Core software which would freeze the stolen tokens given network adoption. This is synonymous to the controversial Ethereum fork which split the chain into two Ether's, ETC and ETH.

Assuming they manage to pull this off, it'll destroy Tethers immutability just as Ethereum did with it's network, however, in Ethereum's case they went a step further and got the coins back for themselves.
The problem with this method of actions is that it's not only dangerous, it's damaging and unfair to others who lose funds for any number of reasons because if the developers or organization promoting the network rolls-back the network for it's own personal gain then why cannot they do it for anyone anytime? Networks lose credibility and immutability under this practice which is one of the key reasons blockchain technology of which they operate on top of exists in the first place. To keep this exact kind of crap from happening.

You can't just pick and choose when and where to take this action or who should get this privilege. 

Troubled Waters

Anyone smell Gox? (Mt. Gox) This sure smells a bit. Both Bitfinex and Tether share ownership and now the two combine for over $100 million USD in supposedly "hacked" funds.

It may be wise advice to avoid Tether tokens as well as the Bitfinex exchange completely for the short term because the evidence is pointing to some foul play. It may well not be "internal", but then again, it could be.

The hack has been possibly tied to the 2015 Bitfinex hack. Bitcoins from Tether's wallet went to this wallet indicating a possible relation.
[warning title="Bitstamp Hacker Ties" icon="info-circle"] You can read more about the hacker ties in this Reddit Post [/warning]
Remember Mt. Gox? Cryptsy, MyCoin, Coin.MX, or the other 30+ exchanges that have fallen over time? They all started out with issues like these and look where they ended up. 

It has happened before and it will... happen again.




Article by dinbits
Image Credits:
Banner Image by dinbits.com staff

Hack ties credit (Reddit): SpeedyChris


The opinions expressed by authors of articles linked, referenced, or published on dinbits.com do not necessarily express, nor are endorsed by, the opinions the of dinbits.com or its affiliates.

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