Tether got hacked and Bitcoin Price experienced a dip for a while. Some users also talked about Bitfinex going down. Both Bitfinex and Tether have officially issued statements bringing clarity.
While cryptocurrencies have an enormous advantage that comes with them, there are also inherent risks. In the business of cryptocurrencies, there shouldn’t be loopholes exploitable by hackers. While the Bitcoin Blockchain boasts of being the most secure of all cryptocurrencies technology, the same cannot be said of others. Tether is a cryptocurrency that embodies real fiat currencies in a 1-to-1 ratio. Tether has two tokens which represent two major fiat currencies –USDT denote the U.S dollars, and EURT represent the Euro. In essence,1 tether will always be equivalent to 1 dollar or euro and vice versa. Tether has been in existence since November 2015. It was initially based on the Bitcoin Blockchain arrangement but later changed to the Litecoin Blockchain system in June 2017.
TETHER GOT HACKED
It is not the first time the tether brand is having problems with its platform. In April 2017, Tethers international customers got their funds frozen due to Tether’s issues with its wire transfer services from their Taiwanese banking partners. The official announcement on Tether’s website read thus:
“Since April 18, 2017, all incoming international wires to Tether have been blocked and refused by our Taiwanese banks. As such, we do not expect the supply of tethers to increase substantially until these constraints have been lifted.
For customers with bank accounts outside of Taiwan, we are diligently pursuing alternate funding channels. New banking corridors are in the process of being established, and we are speaking with integrators of USDT about the possibility of intermediate customer redemption processes. Until then, we are asking our customers not to send any additional incoming wires until we can provide a reliable method of receiving funds.”
Tether later filed a lawsuit against its Taiwanese banking partners, but then dropped the suit without any official statements.
A HARDFORK IS UNDERTAKEN
Fast forward to November and a fresh crisis has befallen Tether again. According to cryptocurrency news giants – Coindesk, Tether got hacked and the hackers succeeded in stealing $30.95 million worth of tether. According to Coindesk, the original announcement which has since been deleted from Tether’s website read thus :
“$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.”
It is pertinent to note that Tether runs on the Omni core software client and representatives from Omni core software has promised to release a new version of the software in the coming days that will allow Tether to recover the stolen tethers.
BITFINEX WITHDRAWAL ISSUES
As Tether got hacked, major Bitcoin exchange, Bitfinex which uses the Tether tokens on its platform is also experiencing issues. Observers and customers of the heavyweight Bitcoin exchange have lamented the delays with withdrawals of their funds. Many have expressed their fears saying Bitfinex might crash like MtGox if the current crisis is not well managed. Observers believe the problem may be related to the relationship between Tether and Bitfinex. Some Bitfinex users say Bitfinex is putting its customers at risk and may result in massive losses due to illegal trading practices.
Bitfinex has not offered any official statement regarding the claims of its users, but it remains to be seen what will happen in the coming days.