A Chinese cyber-security firm has found a possible error in the Tether stablecoin cryptocurrency. The firm, named SlowMist, state that they were able to fraudulently add Tether to an exchange’s server, therefore giving the impression of funds being added. This means that USDT can be added to an exchange illegitimately. If this bug found in Tether is accurate, it could be detrimental to the cryptocurrency industry, as several large exchanges use USDT as a trading pair. Within the tweet, SlowMist gave the impression that this bug allows for double spends.
How serious is the bug found in Tether?
The possible bug has been examined by many cryptocurrency users and programmers, to determine its danger. So far, the consensus seems to be that, rather than it being a bug found in Tether, it is more so a bug found in an exchange. Both the founder of Omni (the software Tether runs under) and a core developer of Omni have taken to Reddit to ease people’s worries. The founder stated that he “designed Omni so that to double-spend an Omni asset, you would have to double-spend bitcoin”. As double spends are a rarity in Bitcoin, they must also be rare for Omni assets such as Tether. The founder further notes that “If I’m translating this correctly, it appears that what happened here is that an exchange wasn’t checking the valid flag on transactions. They accepted a transaction with valid=false (which they should not have), and then the second “double spend” transaction had valid=true, which they also accepted.” He explains that this bug found in Tether is actually an exchange simply not checking for valid flags during transactions.
The founder does not state which exchange is allowing this to happen. This has led to several platforms releasing information confirming that they are not affected by the bug. In a tweet, Bittrex stated that the issue has nothing to do with them, and Okex noted their safety through a press release.
Controversy regarding Tether
While the bug found in Tether may not be too alarming, cryptocurrency enthusiasts are still concerned about the coin. Tether has been subject to numerous controversies within the industry. A study from the University of Texas published a paper which provided reasons to believe that Tether has been trying to manipulate the market. This ties closely to worries about Tether’s lack of transparency. The problems raised by this bug, whether it is the doing of Tether or exchanges, only adds to people’s apprehension about using the stablecoin.
Kai is a cryptocurrency copywriter and professional trader. He can often be found investigating various cryptocurrencies, whitepapers, and blockchain technologies. Kai has been a professional writer for 5+ years, and has invested in 50+ different coins and tokens. He also currently studies Law and Philosophy at university.