Tether reports $31M in digital tokens stolen

By Allen Cone  |  Nov. 21, 2017 at 1:07 PM
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Nov. 21 (UPI) -- Tether, a company that helps exchange government tender to tokens, said close to $31 million of its digital currency was stolen.

The Hong Kong-based company said a since-removed post online that a "malicious action by an external attacker" removed the tokens from the Tether Treasury wallet Monday and sent them 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 company said.

The company said that it is releasing a new version of the Omni Core software client in an attempt to lock up the stolen tokens.

The company said all Tether tokens are fully backed by assets in the Tether reserve except the $30,950,010 in tokens stolen.

Originally launched as Realcoin and later rebranded, Tether is connected to U.S. currency, serving as a proxy for exchanges, including Bitfinex, Poloniex and other markets, without fiat trading. Users store and transfer globally and instantly, according to the website.

"A thorough investigation on the cause of the attack is being undertaken to prevent similar actions in the future," the company said in a statement.

Bitcoin slumped as much 5.4 percent to $7,800 after the Tether hack was disclosed but climbed as high as $8,339 in New York trading Tuesday.

Tether has market capitalization of $675 million and is the world's 20th most-valuable virtual currency, according to data on Coinmarketcap.com.

Several crypto-currency exchanges froze trade in Tether following the announcement, the news site Coindesk reported.

"If tether is actually fundamentally compromised, that will be a very big issue for many exchanges," Arthur Hayes, chief executive officer of BitMEX, a cryptocurrency derivatives venue in Hong Kong, told Bloomberg. "The knee-jerk reaction was that fear."

Zhou Shuoji, a founding partner at FBG Capital, a Singapore-based cryptocurrency investment company, said investors won't flee the service as long as its supported by exchanges.

"The community will overreact to these incidents," Zhou told Bloomberg. "The most important thing is more and more people are watching and using virtual currencies."

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