Cybercriminals on Sunday stole nearly $31 million in USDT cryptocurrency from Tether, prompting the digital currency converter to suspend its back-end wallet service and apparently causing cryptocurrency trading values to fall.
In an urgent online notification posted on Nov. 20, Tether disclosed that external actors removed $30,950,010 in “tether” tokens from the Tether Treasury Wallet, and sent the funds to the unauthorized bitcoin address “16tg2RJuEPtZooy18Wxn2me2RhUdC94N7r”. The company does not explain how this occurred.
“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,” Tether stated in its announcement, advising users not to accept the stolen tokens from the offending address or any downstream addresses that received them.
Tether allows users to store, send, and receive digital tokens pegged to U.S. dollars (referred to as USDT) and other currencies, using blockchain technology that interfaces with the Omni Protocol, an open-source software that allows for cryptocurrency trading.
Aside from suspending the tether.to back-end wallet service and flagging the purloined tokens, the company also is responding to the incident by providing community members with new builds of its Omni Core software in order to prohibit the transfer of stolen currency from the attacker’s address to other locations. “We strongly urge all Tether integrators to install this software immediately to prevent the coins from entering the ecosystem,” the company said in its announcement.
Finally, Tether noted: “We are working with the Omni Foundation to investigate ways that will allow Tether to reclaim stranded tokens and rectify the hard fork created by the above software. Once this protocol enhancement is complete, the Omni Foundation will provide updated binaries for all integrators to install. These builds will supersede the binaries provided above by Tether.to. After the protocol upgrades to the Omni Layer are in place, Tether will reclaim the stolen tokens and return them to treasury.”
According to The Hill, bitcoin prices dropped about 5 percent following news of the attack, while Ethereum’s value sank 5.5 percent and Bitcoin Cash fell six percent. Prices somewhat rebounded by mid-morning Eastern Time today.