$31 million in tokens stolen from dollar-pegged cryptocurrency Tether
All eyes may be on the meteoric rise of Bitcoin at the moment, but it's far from being the only cryptocurrency on the block. Startup Tether issued a critical announcement after it was discovered that "malicious action by an external attacker" had led to the theft of nearly $31 million worth of tokens.
Tether is a dollar-pegged cryptocurrency formerly known as Realcoin, and it says that $30,950,010 was stolen from a treasury wallet. The company says it is doing what it can to ensure exchanges do not process these tokens, including temporarily suspending its backend wallet service.
Tether knows the address used by the attacker to make the theft, but is not aware of either who the attacker is, or how the attack took place. The company is releasing a new version of its Omni Core software client in what it says is "effectively a temporary hard fork to the Omni Layer."
In a statement posted on its website (removed but archived), Tether explains what has happened:
$30,950,010 USDT was removed from the Tether Treasury wallet on November 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. The attacker is holding funds in the following address: 16tg2RJuEPtZooy18Wxn2me2RhUdC94N7r. If you receive any USDT tokens from the above address, or from any downstream address that receives these tokens, do not accept them, as they have been flagged and will not be redeemable by Tether for USD.
The Tether team says that other tokens remain backed by Tether reserves and the only tokens that will not be redeemed are those that were stolen. The company outlines the steps it has taken to get the issue under control:
- The tether.to back-end wallet service has been temporarily suspended. A thorough investigation on the cause of the attack is being undertaken to prevent similar actions in the future.
- We are providing new builds of Omni Core to the community. (Omni Core is the software used by Tether integrators to support Omni Layer transactions.) These builds should prevent any movement of the stolen coins from the attacker’s address. We strongly urge all Tether integrators to install this software immediately to prevent the coins from entering the ecosystem. Again, any tokens from the attackers address will not be redeemed. Accordingly, any and all exchanges, wallets, and other Tether integrators should install this software immediately in order to prevent loss:
Note that this software will cause a consensus change to currently running Omni Core clients, meaning that it is effectively a temporary hard fork to the Omni Layer. Integrators running this build will not accept any token sends from the attacker's address, preventing the coins from moving further from the attacker’s address.
- 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.