Published: Tue, November 21, 2017
Business | By Max Garcia

Another big cryptocurrency heist raises questions about digital money safety

Another big cryptocurrency heist raises questions about digital money safety

A hacker has apparently stolen nearly $31 million from a start-up company that offers dollar-backed digital tokens.

Tether (USDT), a start-up that offers dollar-backed digital tokens, has reported a theft of almost $31 million from its platform.

The amount was taken from the Tether Treasury wallet on November 19 and sent to an unauthorized bitcoin address, according to an announcement on the company's website posted on Tuesday.

Tether would not redeem any of the stolen tokens. Tether said it will investigate the incident while it rolls out an update to Omni Core (its software for partners) that will prevent the stolen coins from recirculating into its ecosystem by essentially locking them into the alleged hacker's wallet.

In response Tether said it has flagged the tokens (meaning that it will track them and prevent the holder from exchanging them through its service) and that it is working to recover them.

Observers online spotted the move earlier in the day, stoking speculation about the nature of the freeze.

According to the official statement: "Yesterday, we discovered that funds were improperly removed from the Tether treasury wallet through malicious action by an external attacker".

Tether also temporarily suspended its back-end wallet service to assist in its investigation.

This announcement comes amidst a time of increased discussion as well as controversy focused on Tether. Coindesk reports that the relationship between Tether and the British Virgin Islands-based bitcoin exchange Bitfinex is under scrutiny for "long-standing allegations the exchange has been using the asset to engage in fraud and market manipulation". Complicating matters is that the two companies are said to share a common ownership, though details remain murky as to their connection.

The value of bitcoin briefly took a dip on Monday evening after a big theft allegedly affected a separate virtual currency system called Tether.

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