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Tether (USDT) to Launch New Platform in Wake of Alleged November Hack

Last Updated March 4, 2021 5:02 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:02 PM

The developers of Tether have said that they will launch a new platform for the cryptographic token following the November security breach that resulted in the theft of $30 million worth of tokens.

Tether Announces New Platform

The startup made this announcement through a post on the Tether website, explaining that it is developing a new platform, complete with a new wallet service and addresses. The new platform was necessitated, the developers said, by last month’s security breach.

As CCN.com reported in November, a hacker allegedly breached Tether’s hot wallet, absconding with more than $30 million in USD-pegged tokens. Following the theft, the developers of Omni — a protocol layer built on top of Bitcoin that Tether uses to issue tokens — released a new version of the Omni Core software that “blacklisted” the stolen tokens from being spent by the attacker.

Tether defended this action in this week’s announcement, arguing that it protected all users against further disruptions.

“This action was not taken lightly and has allowed Tether to safeguard against any further potential disruptions to the ecosystem in an effort to protect the entire community,” the announcement said.

Tether had heavily restricted wallet services following the incident — even as it continued to issue new tokens — but it said that it reopened limited services this week so that users could begin withdrawing funds from their wallets.

Direct Purchases & Sales Disabled

However, new user registrations have been disabled — as have direct purchase and sales of tethers — while the company migrates its services to the new platform. In the meantime, the company advised users to redeem or dispose of their tokens at cryptocurrency exchanges.

“Such exchanges and other qualified corporate customers can contact Tether directly to arrange for creation and redemption,” the post said.

Additionally Tether said that it is in the process of updating its terms of service in response to community feedback. Most notably, the company said the new language will clarify that tethers are fully-redeemable to verified customers unless there is a reasonable legal justification — e.g. accusations involving terrorism financing or jurisdictional restrictions — to prohibit redemption.

Finally, the company said that Friedman LLP continues to perform a full balance sheet audit of Tether’s assets and that the results of the audit will prove that Tether’s bank balances as listed on its website are accurate.

“Any suggestion to the contrary is uninformed and baseless,” the company wrote, rebuffing critics who have expressed concern that Tether is not solvent and that its tokens are being used to artificially inflate the bitcoin price.

Write to Josiah Wilmoth at josiah.wilmoth(at)CCN.com.