30 Million USDT Hacked Might Favor BitUSD of Bitshares
Tether released a statement 21 November 2017, claiming 30 million USDT tokens has been granted to an unauthorized address. An emergent patch of omnicore is also released to fix the problem. The USDT tokens tainted by the address is blacklisted and not redeemable for USD. The market took a hit but soon recovered most of the loss. Tether ask client to be patient for further investigation. OKCoin, Huobi and Binance announced suspension on the USDT Deposit and Withdrawal shortly after.
It’s the first omni-based assets hacking job if confirmed. Omni protocol is based on bitcoin blockchain network and was considered as secure as bitcoin itself. However, such trust may have become less stable after the incident. Tether has been adopted by many exchanges since its establishment in 2014. As a means of exchange, the transfer of USDT is encoded in bitcoin txs based on omni protocol. There have been accusation and alarms for the insolvency of Tether. An article on medium points out that traders on Bitfinex are using “Fraudulent Tethers” for margin lending. Kyle Torpey addressed USDT as a “ticking time bomb” in September.
Since the adoption of USDT by Huobi and OKEX in October, Chinese traders are getting familiar with the “stable coin”. Tether has issued 205,048,400 USDT tokens in November alone. The increasing concern has finally reached the ears of Bitfinex, one of the leading bitcoin exchanges in the world. The company cannot ignore such growing “FUD” and saying that they will release a formal statement on 19 November.
“Bitfinex is solvent and both fiat and crypto withdrawals are functioning as normal. We are seeing increasing FUD which we believe is a co-ordinated attack to create a market disrupting event”
Bitfinex is solvent and both fiat and crypto withdrawals are functioning as normal. We are seeing increasing FUD which we believe is a co-ordinated attack to create a market disrupting event 1/2
— Bitfinex (@bitfinex) November 19, 2017
However, every coin has two sides. Wu Guanggeng, founder of Bixin, said that the incident might be a good news for bitusd, bitcny of bitshares, another “stable coin” in the market. He said it’s OK for Tether, as a company, to nullify the stolen tokens through hard fork. The impact of the incident might include:
1. Exchanges might hesitate to accept USDT.
2. Could be a good chance for bitusd or bitcny of BTS.
AlbertTheKing, renowned trader and analyst of cryptcurrency, said:
Tether is a centralized asset. Hard fork will fix the problem. Zhao Dong believe that Tether is reliable.
Those who have doubts on the solvency of Bitfinex doesn’t have substantial evidence to support their allegations. But his personal opinion is that he would stay away from exchanges that rely on heavily on USDT.
There has never been a dull moment in the world of cyrptocurrency.