Tether, a startup that works with bitcoin exchanges, claims a hacker stole $31M

By John Russel for Tech crunch

Bitcoin cruised past $8,000 for the first time this week, but it hasn’t been smooth sailing for all after Tether — a company that helps exchanges convert fiat currency to token — said today that a hacker snatched nearly $31 million.

Tether operates USDT, a cryptocurrency asset that it backs via the U.S. dollar. The company said that $30,950,010-worth of USDT was taken from its core treasury wallet “through malicious action by an external attacker.”

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.

For partners, the back-end wallet service has been suspended. 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.

One of the partners that uses Tether is crypto exchange Bitfinex, which itself lost 119,756 bitcoin — then worth $72 million but valued at over $950 million today — in a hack over a year ago.

As Coindesk reports, the incident is sure to throw up more questions about the relationship between Tether and the secretive exchange Bitfinex. The duo are rumored to share owners, and have been accused of leaning on each other to manipulate the market. Already, there are theories circulating that suggest this new attack could be an inside job.

Bitcoin’s value took a dent when the news came out, but it quickly recovered. At the time of writing, bitcoin’s value stood at $8,126.71, down 1.35 percent over 24 hours, according to Coindesk.