Tether’s USDT Hacked for $31 Million
It’s time for a safer alternative.
On November 19, 2017 the startup company Tether was hacked, having $30,950,000 USDT taken from its treasury wallet. Tether converts cash into digital currency, to anchor or tether the value to the price of national currencies like the US dollar, the Euro, and the Yen. USDT is a cryptocurrency token pegged to the US dollar, which is fully backed by assets in the company’s reserve account.
USDT has become a popular token amongst cryptocurrency traders seeking a stable asset to hold profits in between trades. Tether also acts as a dollar substitute that can be moved between exchanges.
Tether has made it clear that they will not redeem any of the stolen tokens and that it is in the process of attempting to recover the tokens to prevent them from entering the broader ecosystem.
The company wrote:
“$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.”
This recent hack is making investors nervous. Bitcoin’s price dropped sharply on the news in morning trade, but was able to recover much of its recent gains. New information is pointing to a possible but unconfirmed connection between this hack and hackers responsible for stealing $5 million in Bitcoin from European exchange Bitstamp nearly three years ago.
Tether has said that it is releasing a new version of the Omni Core software client to try and lock up the tokens it alleges were stolen. Should nodes in the network adopt the software, it would effectively blacklist the stolen address, enacting an emergency fork to contain the funds.
According to the Tether website, they offer “world-class security”.
“Tether’s blockchain-enabled technology delivers world-class security while meeting international compliance standards and regulations.”
This latest security failure has many investors looking for a viable alternative to Tether.
Is There a Tether Alternative?
The cryptocurrency markets are notoriously volatile and regularly experience massive price swings. Cryptocurrency investors and those who wish to conduct commerce need a relatively stable unit of exchange.
Bitshares solves this problem with Market Pegged Assets (MPA). Market Pegged Assets are freely traded digital assets whose value is meant to track that of a conventional underlying asset.
Put more simply, MPAs allow the creation of tokens which have a value pegged to another asset. This allows holders of the token to achieve the stability they need while maintaining the properties and advantages of a cryptocurrency.
BitUSD could be used as an alternative to USDT offered by Tether. However, these assets are not limited to fiat and can include commodities like gold and silver. Some of the MPAs available include:
• (Bit)USD
• (Bit)CNY
• (Bit)EUR
• (Bit)GOLD
• (Bit)Silver
BitAssets can provide stability by anchoring themselves to a stable asset such as the US dollar (bitUSD). They can also easily give you the means to create a diversified portfolio, with exposure to a variety of currencies and commodities.
To top it all off, these assets can be traded on the BitShares Decentralized Exchange, where the security of funds rests in the hands of the user. Not only can you use MPAs to avoid the risk of volatility, but you can also avoid the risk of leaving your funds on a centralized exchange that is vulnerable to attackers.
As new hacks hit the headlines, there will be more and more demand for secure decentralized services. BitShares has a well-established and well tested decentralized exchange. With the addition of MPAs, BitShares and more specifically bitUSD, becomes an attractive alternative to Tether.
