Reddit user found vulnerability in Tether

The connection between Tether breaking and earlier hacking is foun
22 November 2017   554

Reddit user SpeedflyChris published the results of his cryptoramination from the blockchain. He has found that the Tether’s hack is very similar to Bitstamp’s hack in 2015 year. Then was lost 19000 BT.

The user considers that the Tether vulnerability appears’ source is connected with the wallet used to steal from Bitstamp. This wallet was used to make 2 transactions with 0.01 BTC for each to the address.

SpeedflyChris wrote that this wallet made two transactions, the first is fairly innocuous and illustrated it by link.

Then it removed $30,950,010 USDT from the Tether and sent it to final bitcoin address. This transactions was structured like an additional security layer and this allowed hackers to get tokens without any problem.

Also SpeedflyChris thinks that with this wallet was stolen 12000 BTC from Huobi in 2015 year. Then was used exactly the same scheme with microtransactions which was used with Bitstamp and Tether.


Third-Party Audit Finally conducted by Tether

All the allegations stating claiming that Tether has “unencumbered assets exceed the balance of fully-backed USD Tethers” are cleared by the report
21 June 2018   151

After recently conducting an audit, Tether declared, that a law firm had confirmed that, as of 1st June, the company has more than bountiful amount of USD for the circulating USDT tokens. Tether was supported by the services of Washington-based law company Freeh Sporkin & Sullivan LLP (FSS) to revise bank account documents and to randomly inspect circulating Tethers and corresponding USD reserves.

Tether on their Twitter
Tether on their Twitter

As for  the firm’s credit, it was founded by 3 former federal judges. Earlier this year Tether involved Freeh, Sporkin & Sullivan LLP to survey bank account documentation and to perform an inspection of the numbers of Tethers in circulation & the corresponding currency reserves.

The law company also declared Tether’s compliance to AML standards, paperwork towards to personnel and corporate structure, and historical records about the amount of issued and outstanding Tethers, along with a variety of other documents. Tether’s problem began as the company parted its ways with its previous auditing partner Friedman LLP in late January. Even after facing a massive backlash the firm did not hire any third-party to go through its books. Because of the firm’s ties with the crypto exchange Bitfinex, it faced many allegations for the Bitcoin price manipulation. 

On June 13th, two researchers at the University of Texas at Austin issued a report called “Is Bitcoin Really Un-Tethered?” in that they stated to have found fresh evidence of Tether’s market manipulation tactics of Bitcoin and other major altcoins by flooding the market with USDT. Tether in their recent transparency update, admitted the scrutiny and affirmed that “much of the speculation and negative reporting” was due to “misunderstandings” of the firm’s business model.