Friday, July 23, 2021

Hackers ask 500 Bitcoin ransom from Tether

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Tether, the issuer of the USDT stablecoin, claims to have received a ransom note asking for 500 bitcoin (currently worth about USD $22 million), lest documents are made public that could “harm the bitcoin ecosystem.”

Tether has revealed a ransomware demand in which threat actors are allegedly demanding 500 Bitcoin ($24 million). 

Over the weekend, the blockchain and cryptocurrency organization said on Twitter that a demand for payment had been made, on pain of documents leaked online that would “harm the Bitcoin ecosystem.” 

Tether serves an important, though sometimes controversial, role in the cryptocurrency market. Its USDT token, pegged to the U.S. dollar, is used by traders, exchanges, and throughout the crypto economy, giving it what some call systemic importance. 

At the time of writing, the wallet address associated with the demand has $72 in BTC stored. 

In the past year, coinciding with the meteoric rise in bitcoin’s price, Tether’s market cap exploded to over $34 billion from $2 billion.

Tether has claimed that every USDT issued is backed by dollars or dollar-equivalents held in a bank account, which has become a contention point among academics, crypto-skeptics, and the New York Attorney General (NYAG). 

Tether said that the payment deadline is March 1 but added, “We are not paying.”

“It is unclear whether this is a basic extortion scheme like those directed at other crypto companies or people looking to undermine Tether and the crypto community as a whole,” Tether says. “Either way, those seeking to harm Tether are getting increasingly desperate.”

The emails have not been verified. Tether denied their legitimacy in the same Twitter thread announcing the extortion attempt.

In a separate tweet, Tether and Bitfinex CTO Paolo Ardoino said the primary goal of these alleged leaks “is to discredit #bitcoin and all #crypto.”

“While we believe this is a pretty sad attempt at a shakedown, we take it seriously,” Tether commented. “We have reported the forged communications and the associated ransom demand to law enforcement. As always, we will fully support law enforcement in an investigation of this extortion scheme.”

In other Tether news, the organization has reached an $18.5 million settlement with the New York Attorney General’s Office to settle a case in which both Tether and Bitfinex were accused of covering up an $850 million loss.

Tether admitted no wrongdoing but has agreed to settle, a gesture the firm says “should be viewed as a measure of our desire to put this matter behind us and focus on our business.”

Priyanshu Vijayvargiya
Founder and Editor-in-Chief of 'Virtualattacks Inc' Priyanshu Vijayvargiya is a cybersecurity analyst, Information Security professional, developer, and a white hat hacker.


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