(BlockBar) Because of human error, Tether unexpectedly printed out $5 billion worth of encrypted currency linked to sovereign currency.
This error occurred during the Tether team’s move of tokens from the Omni layer to the wave field block chain. It was supposed to be a $50 million transfer because someone misplaced the decimal point and turned it into $5 billion.Poloniex, the encrypted currency exchange, clarified that the problem occurred after it asked Tether to assist in token swaps. Paolo Ardoino, chief technical officer of Bitfinex and Tether, said the team had immediately tackled the problem by destroying the accidentally generated tokens before they affected the global encrypted money market.
The unexpected $5 billion USDT issue took place at 6 a.m. on July 14th. Four minutes later, Tether’s team quickly destroyed the $500 million USDT and subsequently destroyed another $4.5 billion tokens. So, it did not have much impact on the market.
Ardoino explained that cooperation with multiple block chains is prone to raise some accidents. At present, USDT issues stable currencies on Omini, ETF, wave field and EOS at the same time. He said they had begun to address such problems and prevent them from happening again, but he did not mention what measures they would take. He said “Unfortunately, we have to play with different toolchains across multiple blockchains and sometimes issues happen. We’re working anyway to prevent this from happening in the future.”
Tether initially released USDT on Omni, which operates based on the Bitcoin protocol. However, ETF’s ability to support smart contracts compatible with tokens locally provides versatility that Bitcoin cannot provide. EOS also combines smart contracts with low-cost, fast transactions.
The accident was somewhat ironic. After all, USDT’s parent company and its relationship with the encrypted currency exchange Bitfinex are controversial. Just a few months ago, Tether admitted that its tokens were not 100% dollar-backed, but a basket of other assets. In March this year, Tether updated its official website: “Every USDT has 100% reserve support, including traditional currency and cash equivalents, and sometimes other assets and accounts receivable (loans from Tether to third parties), which may include subsidiary entities (collectively referred to as “reserves”).
However, Tether first wrote in the USDT white paper: “Every USDT is always linked to our traditional reserve currency of 1:1, so 1 USDT is always equal to 1 USD.” Cartists say the statement once again undermines the USDT’s already damaged credibility and undermines its position as a true stabilizer.
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