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Bitcoin Crime The Almighty Buck

$31 Million In Tokens Stolen From Dollar-Pegged Cryptocurrency Tether 63

Mark Wilson shares a report from BetaNews: All eyes may be on the meteoric rise of Bitcoin at the moment, but it's far from being the only cryptocurrency on the block. Startup Tether issued a critical announcement after it was discovered that "malicious action by an external attacker" had led to the theft of nearly $31 million worth of tokens. Tether is a dollar-pegged cryptocurrency formerly known as Realcoin, and it says that $30,950,010 was stolen from a treasury wallet. The company says it is doing what it can to ensure exchanges do not process these tokens, including temporarily suspending its backend wallet service. Tether knows the address used by the attacker to make the theft, but is not aware of either who the attacker is, or how the attack took place. The company is releasing a new version of its Omni Core software client in what it says is "effectively a temporary hard fork to the Omni Layer."
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$31 Million In Tokens Stolen From Dollar-Pegged Cryptocurrency Tether

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  • SFYL (Score:5, Insightful)

    by Baron_Yam ( 643147 ) on Tuesday November 21, 2017 @09:13PM (#55600117)

    They have a script, you know. This has been played out over and over and over and it pretty much always ends the same way - with the criminals fading away and the 'investors' moving on to get fleeced by the next crypto scam.

    • Yes and its a forked script as well... the only thing thats stopping most people is their sense of morality... and its comforting knowing you could be very wealthy if it were not for that little thing. :)
    • ...and the 'investors' moving on to get fleeced by the next crypto scam.

      Speaking of which, how do I get in touch the new owners of those supposedly "stolen" 31 million crypto-dollars? Since those 31 million dollars have been disabled and are worth nothing now, is there a private auction where one could possibly bid on those worthless crypto-dollars?

      The attacker is holding funds in the following address: 16tg2RJuEPtZooy18Wxn2me2RhUdC94N7r. If you receive any USDT tokens from the above address, or from any downstream address that receives these tokens, do not accept them, as they have been flagged and will not be redeemable by Tether for USD.

      Under what authority does Tether think it has the right to siphon away $31 million dollars? How are we supposed to know that Tether is not lying? Is that how crypto-currencies are supposed to work? Are we supposed to reward the most

  • by sinij ( 911942 ) on Tuesday November 21, 2017 @09:19PM (#55600147)
    >>>but is not aware of either who the attacker is, or how the attack took place

    This does not instill confidence.
    • by thereitis ( 2355426 ) on Tuesday November 21, 2017 @11:54PM (#55600827) Journal
      On the other hand, if my credit card gets stolen then it's insured against loss. I don't pay a nickel. How are crypto currencies ever going to provide a similar safeguard without centralization of some sort?
      • by Interfacer ( 560564 ) on Wednesday November 22, 2017 @02:20AM (#55601261)

        They're not. There's also absolutely no way to 'undo' transactions if someone makes a mistake. The only option that exists is to do a hard-fork, revert the entire blockchain to a point where one or more specific transactions have not happened. This has happened once, with the DAO hack and the Ethereum hard fork which was done to mitigate it.

        This is obviously very risky because you risk destroying the project if the fork does not get universal support. The only reason it was a success for Ethereum was that the project at that point was still fairly small, and the amount involved was a single transaction and none of the coin had propagated to other places. These days it would be all but impossible to pull off the same support for a hard fork. People who were victims of the recent Parity fuck-up in which a million ETH tokens are frozen forever: they're SOL. I am fairly certain there's not going to be a hard fork.

        So you are correct: from a consumer standpoint, crypto currency has several advantages, but also several downsides.

        • There's also absolutely no way to 'undo' transactions if someone makes a mistake

          There no way to undo many real world transactions either. That's why it's called "insurance".

    • This does not instill confidence.

      It's not supposed to.

      Now if you try to redeem your tokens for US dollars, Tether can just claim that they were stolen instead of redeeming them to you instead of admitting that those tokens were never worth those amounts it claimed they were worth in the first place.

  • Seems like criminals like the anonymity of blockchain currencies.

  • by shaitand ( 626655 ) on Tuesday November 21, 2017 @09:40PM (#55600271) Journal
    Just because it is a cryptocurrency, doesn't make it proven like bitcoin is proven. All sorts of third party scams have been running using bitcoin from the fed raid of silk road to mt gox but the bitcoin system itself has proven solid despite being the tool and target of every hacker around the globe and no other cryptocurrency even comes close to having passed that pressure test. Your tether, ether, dodgecoin, pokemon-emo-coin whatevers might be digital currency with cool and snazzy sounding ideas but they are barely even on the radar yet and many of them have been riddled with serious flaws. Interest in them and their value could disappear overnight. It is reasonable safe to say that no matter what happens, bitcoin is unlikely to go anywhere soon even if it ends up eventually being used as a reserve currency for some next gen winner that handles microtransactions more efficiently bitcoin will still hold value.
    • Is bitcoin secure because those involved in the administration of it are honest? Can the admin actually pull something like this off ? Not many people know about the backend of bitcoin.
      • Re: Who Runs bitcoin (Score:4, Informative)

        by shaitand ( 626655 ) on Tuesday November 21, 2017 @10:06PM (#55600411) Journal
        "Is bitcoin secure because those involved in the administration of it are honest?"

        Bitcoin is secure because administration of it is completely decentralized so that nobody has to trust anyone. The entire thing is set up so that any point you are depending on the consensus of lots of random third parties who have no way to know what they are giving an opinion on, no way to influence what comes their way, and nothing to gain from the outcome. At every point it uses insane and impossibly large numbers rather than tricks or secrets and assumes everyone is greedy. How do you get lots of people to volunteer to verify transactions they can't cook for personal gain? Call it mining and give them the new chunks of bitcoin plus the transaction fees. Solid strategies with mathematical proofs, a total lack of trust, and no assumption but a general tendency toward self-interest. That is the bitcoin way.

        The other thing it does is shift a lot of the burden of "security" onto the users. Bitcoin makes sure that you can trust the bitcoin I just gave you is real, I actually had it in my pocket, and that I can't somehow take it back afterward. It entirely shifts the burden to you to care or not care about whether I got it clubbing seals or helping old ladies cross the street and to me to make sure I'm not buying the Brooklyn bridge. I tend to agree with the makers of Bitcoin, it isn't that those things are important but they aren't the responsibility of the dollars in your wallet.
        • Bitcoin seems secure because it hasn't been visibly plundered by anyone yet. The day after it is we will know it was insecure all along. It is based on a number of assumptions that might not hold up. For example that "computing work" is reasonably similarly expensive for everyone (ie. no vastly faster hardware or algorithm will ever be narrowly deployed) and that any connectivity partitioning is benign and relatively short lived. And that the basic software is not going to be tampered with in any widespread
          • It's got a $140billion market cap, if it was going to be plundered then it would have happened a long time ago because that's quite some booty!

        • Thank You. :)
    • Bitcoin is hardly proven, and you will find this out when the economics don't work out like the fools expected. Beyond that, it's just wasteful. All that hashing to find a special result is a waste of energy. It's not even useful for peer to peer transactions like cash is - you have to be connected to the network to validate the transaction and you might be waiting minutes or even hours if your transaction doesn't make it into a block right away. Plastic cards are processed in seconds. Cash is immediate.

      • Re: (Score:2, Interesting)

        by shaitand ( 626655 )
        "All that hashing to find a special result is a waste of energy."

        That hashing isn't to find a special result, it's to validate transactions. "Cash is immediate." 80% outside the country of origin is also fake, all that "wasteful hashing " means there is no fake bitcoin... anywhere. Plastic cards also are not processed in seconds, those transactions can be reversed up to 90 days later that is a hell of a lot longer than it takes to fully process bitcoin.

        Hell, I once worked a holiday season at a Michael's cra
    • Re: (Score:2, Funny)

      by Anonymous Coward

      Ah yes, Bitcoin has had no breaches, fraud, or security issues in its 9-year lifetime. The perfect currency. Finally.

    • Litecoin and Dogecoin have existed for a long time, almost since the beginning right after Bitcoin.

  • by bistromath007 ( 1253428 ) on Tuesday November 21, 2017 @09:57PM (#55600363)
    That's nothing. I'm working on a new cryptocurrency backed by The US Dollar. Specifically, the one in my sock drawer. If anyone can manage to corner the market on DollarCoin, they can trade it straight across for The US Dollar. That's value you can take to the bank.
    • by lucm ( 889690 )

      the one in my sock drawer.

      If you are an attractive female, everything in that sock drawer is a hot currency on the right exchange, such as craigslist.

  • If your cryptocurrency is called "RealCoin", then why do you care if "tokens" are stolen? Isn't the point of a token to be a low-value stand-in for money? In case it gets stolen, you change the token, not the currency.
  • by Anonymous Coward

    wait until suckers pour in the cash then when you think the pot is full, bail and roll out the trope "we were hacked", this is the real "business" model. lets hope the police/SEC look into the staff activities a bit more closely.

  • by Hognoxious ( 631665 ) on Wednesday November 22, 2017 @05:44AM (#55601837) Homepage Journal

    Shocked? Is anyone shocked?

  • by Kaenneth ( 82978 ) on Wednesday November 22, 2017 @06:02AM (#55601893) Homepage Journal

    You want to give me shiny lumps of metal for my goats, are you insane?

    You want to give me slips of paper backed by shiny lumps of metal for my goats, are you insane?

    You want to give me slips of paper not backed by shiny lumps of metal for my goats, are you insane?

    You want to give me data backed by paper not backed by shiny lumps of metal for my goats, are you insane?

    You want to give me data not backed by paper not backed by shiny lumps of metal for my goats, are you insane? --- where we are now

    • by tgeek ( 941867 )
      I don't know if I would mod this as Insightful or Funny . . . if I had any mod points /shrug
    • You want to give me goats, are you insane?

      Seriously, though, proper cryptocurrencies like Bitcoin are backed by math, not some silly agreements between people. But I'm not sure if those Tether tokens count as proper cryptocurrency.

  • by HalAtWork ( 926717 ) on Wednesday November 22, 2017 @07:51AM (#55602149)

    That doesn't give me confidence in the currency, if my money could be frozen at someone else's whim.

    • That doesn't give me confidence in the currency, if my money could be frozen at someone else's whim.

      I know what you mean. Imagine if some (relatively) stable country were to pull it's 500 and 1000 rupee denomination notes suddenly. Chaos would ensue. But that would never happen, would it?

      Oh wait: http://www.dailymail.co.uk/wir... [dailymail.co.uk]

It is wrong always, everywhere and for everyone to believe anything upon insufficient evidence. - W. K. Clifford, British philosopher, circa 1876

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