Tether (USDT) Has Been Hacked!
The Tether Treasury's portfolio was hacked, resulting in the loss of USD 31 million in USDT, a crypto-token that sets its value to the US dollar through inflationary monetary policy.
In an official announcement, Tether's development team said:
"Yesterday, we discovered that the funds were inappropriately removed from the Tether Cash Portfolio by malicious action by an external attacker. $ 30,950,010 USDT was withdrawn from the Tether Treasury Portfolio on November 19, 2017 and sent to an unauthorized bitcoin address. Since Tether is the issuer of assets managed by the USDT, we will not redeem any of the stolen chips, and we are trying to recover the chips to prevent them from entering the wider ecosystem. "
Criticism of the experts
Many experts in the cryptocurrency industry, developers and analysts criticize Tether because of the method that was used to deal with the hacking attack. Most of the criticism was directed at the centralized, one-sided decision of the Tether development team to block funds and suspend Tether's back-end portfolio service, without any consensus from the community or public hard fork.
Professor Cornell Emin Gun Sirer wrote:
"Tether quietly made a hardfork to blacklist a specific address and freeze funds. Three questions: 1. Who controls the Ledger Omni and who can do this kind of operation? 2. Why was this address blacklisted? 3. What other addresses are the following? "
Tim Swanson, founder of Of Numbers and PostOakLabs, has expressed concerns about Tether's lack of transparency, since software, patch and forks updates can be executed in an opaque way, which could ultimately trigger the involvement of Tether. the application of the law.
"Earlier today, Tether blacklisted a specific address. This address has $ 31M from Tether USDT and their explorer has been down all day. Does this mean that law enforcement agencies are reviewing their non-transparent operations? "
Controversy around Omni Core
According to the Tether Critical Announcement issued by the Tether development team, Omni Core is used by Tether integrators to support Omni layer transactions. Thanks to the software, Tether has the power to prevent the movement of stolen coins from the pirate's address.
But such a level of centralization exposes Tether to the manipulation of the network and funds, considering that with the pressure of the forces of the order, the development team Tether is able to prevent the funds from circulating on the network and of disable certain addresses indefinitely.
Public blockchain networks such as bitcoin are valuable because of their security value. Their immutable, decentralized and unalterable nature eliminates the possibility of government interference, creating independent economies and protocols that operate under strict network rules.
The fact that the addresses and funds within the Tether network can be easily modified and manipulated by a small group of network operators presents a dangerous vulnerability as a blockchain network, and also raises a question about the need for blockchain technology .