A cyber thief hacked into Tether, a Santa-Monica, California-based start-up that provides dollar-backed cryptocurrency tokens, making off with roughly $31 million worth of tokens. The company serves as a proxy for the U.S. dollar, euro, and soon, the Japanese yen. Those currencies can be sent via exchanges including Bitfinex, Poloniex, Omni, GoCoin and additional markets. According to an announcement on the company’s official website this week, the unknown hacker stole the tokens (worth $30,950,010) from the Tether Treasury wallet on November 19 and sent them to an unauthorized Bitcoin address (Here: 16tg2RJuEPtZooy18Wxn2me2RhUdC94N7r). “The stolen tokens will not be redeemed, but the company is in the process of attempting token recovery in order to prevent them from entering the broader cryptocurrency market.” [source] Analyst comment: The hack is significant in that Tether is the world’s first blockchain-enabled platform that allows traditional currency to be utilized like digital currency. With a market capitalization already at about $673 million, Tether was poised for good growth and was well-positioned to become the leader in traditional currency-to-cryptocurrency transition. But this is the real danger of relying too heavily on cryptocurrency: It’s ‘virtual’ — not real — and thus subject to various outside dangers not endemic to physical cash or gold. These dangers include hacking, of course, and cyber attacks on cryptocurrency systems that can wipe out wealth with the click of a keyboard.
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