Binance just transferred 6B Tethers to an unknown address(twitter.com)
twitter.com
Binance just transferred 6B Tethers to an unknown address
https://twitter.com/whale_alert/status/1450005292599726083
12 comments
Isn't it maintenance related as linked to in a reply to that tweet? https://www.binance.com/en/support/announcement/27d6afd43209...
This seems to happen every time a Twitter link is posted to HN: people go off on some wild speculations when actually the detail is already published elsewhere and is usually pretty mundane.
so they are changing cold wallets, how is this news?
98k transactions in the last 24h doesn't sound like a cold wallet. Maybe hot wallet maintenance though, it looks like it's mostly dispursing to addresses that look like small user addresses (e.g. ~20 txns hold a couple different tokens, just transfer them around)
Could mean they are trying to convert them into dollars again, without breaking the peg. Maybe they want to be the first to rush to the exit as they know there's most likely not enough USD backing behind tether (not 1usd:1usdt) to pay everyone back.
They have no legal obligation to pay anyone back.
Yes they do, https://tether.to/legal/ even listed in their policy.
They may not have the obligation but then the business is sunk. It would be dust in the wind in days as everyone transfered as much out as possible
It seems they do have a contractual obligation of sorts. The Tether TOS state "The right to have Tether Tokens redeemed or issued is a contractual right personal to you." This language appears beginning in 2016. It is, unsurprisingly, light on the details. But the language does imply that the right exists and is non-transferrable.
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Full disclosure I'm totally not versed in crypto at all, but I do recall reading something on HN a while ago that teather is audited but one of the big 5 auditors (not that it means much, look at 1MDB etc)?
Tether is pretty notorious for not being audited. And for repeatedly having auditors look at their accounts then run for the hills.
It cost $0.03 for the transaction.
As someone pointed out, if they made a typo, or if there was a malicious insider, it would cost them 6B to make this transaction.
The cost of a transaction also includes the probability of making a mistake times the cost of that mistake. The probability of making a mistake here is not zero.
The cost of a transaction also includes the probability of making a mistake times the cost of that mistake. The probability of making a mistake here is not zero.
Didnt some major bank recently make a similar-scale mistake from a weird UI issue, and they couldn’t revert the transaction?
Yes, Citi did. They couldn't revert the transaction because they accidentally paid off the full value of a debt when making an interest rate payment on behalf of a client, and the law says that repayment of a debt does not need to be returned in case of error.
haha should have used tether.
Yes, but as another poster pointed out, their problem was that they owed their counterparty money. The courts ruled that early accidental repayment of a debt did not have to be returned.
If they wired me 6 billion dollars, I would not get to keep it.
If they wired me 6 billion dollars, I would not get to keep it.
>>If they wired me 6 billion dollars, I would not get to keep it.
And this is why Crypto is unlikely to see wide use for large, legitimate transactions.
The legal concept of ownership is based on the intent and understandings of real humans amongst each other, and with each other's consent. It is technology independent. There are legal remedies to fix mistakes and unwind transactions. This is critically important for people feeling comfortable engaging in these transactions. If a typo can cost you your life savings, you're going to have a tough time moving forward.
Crypto does not have this. It would be like paying for something with a briefcase full of cash that you leave behind the third trashcan on the right. Or was it the second one on the left?
And this is why Crypto is unlikely to see wide use for large, legitimate transactions.
The legal concept of ownership is based on the intent and understandings of real humans amongst each other, and with each other's consent. It is technology independent. There are legal remedies to fix mistakes and unwind transactions. This is critically important for people feeling comfortable engaging in these transactions. If a typo can cost you your life savings, you're going to have a tough time moving forward.
Crypto does not have this. It would be like paying for something with a briefcase full of cash that you leave behind the third trashcan on the right. Or was it the second one on the left?
Anyone transacting crypto with an entity that shares a legal jurisdiction is going to have the exact same legal remedies for fraudulent or mistaken transactions. Just because a transaction is settled in crypto doesn’t mean the counterparties are magically transported to an extralegal universe with no possible remedies.
The extra risk that crypto carries is a risk of “black hole” transactions—your mistake causes the money to be vaporized. There are many ways to avoid such a mistake, and I’d argue that the rate of accidental unspendable transactions is vanishingly low which would imply that this is basically a solved problem.
The extra risk that crypto carries is a risk of “black hole” transactions—your mistake causes the money to be vaporized. There are many ways to avoid such a mistake, and I’d argue that the rate of accidental unspendable transactions is vanishingly low which would imply that this is basically a solved problem.
I think that’s a valid point about large legitimate transactions. But I think crypto has a valid use for medium legitimate transactions, for example, buying a car off Craigslist or sending money to your family overseas
Look at the address they sent to. This was not a mistake.
https://tronscan.org/#/address/TV6MuMXfmLbBqPZvBHdwFsDnQeVfn...
https://tronscan.org/#/address/TV6MuMXfmLbBqPZvBHdwFsDnQeVfn...
That is a UX issue. Nobody is arguing that crypto is prime time ready for grandma to use it.
Everything is cheap unless it's on one of the really really high value chains like bitcoin or ethereum.
Also fees are based off of data/processing not percentage wise so 0.03 really doesn't matter that much in terms of blockchain.
Also fees are based off of data/processing not percentage wise so 0.03 really doesn't matter that much in terms of blockchain.
At this rate, that's worth more than the Tether.
At this rate, tether will continue to be continue to be worth $1.00 https://coinmarketcap.com/currencies/tether/
You might think this rate will change, but 0% up/down is the current rate.
You might think this rate will change, but 0% up/down is the current rate.
Stock in Enron was also "worth money" until it wasn't.
And stock in Amazon wasn't worth money until it was! Not defending Tether but just naming something unrelated and not even trying to argue similarity is pretty low effort and not compelling.
Amazon lost money transparently as part of their bid to grow. Tether (like Enron) is concealing the true nature of their losses.
There are also parallels found in other frauds like Bernie Madoffs Ponzi Scheme to the tether fraud.
There are also parallels found in other frauds like Bernie Madoffs Ponzi Scheme to the tether fraud.
And both those companies had real word assets to base their valuation on, not just hype and power hungry GPU farms.
So if they made a typo, would it be lost to the void?
I mean probably not since they control the blockchain and they can fork it to undo the transaction, but still. That's a lot of money to move in one go.
I mean probably not since they control the blockchain and they can fork it to undo the transaction, but still. That's a lot of money to move in one go.
First I'm willing to bet that they made 100% sure they can sign a tx out of that new address. Even if the address is seen for the first time on a public ledger, they may very well have tested first that the HSM allowing to sign a tx for that address was working on a private, offline, chain.
Then the transaction itself to move those 6 bn has probably been prepared offline, on a fully airgapped computer, signed with a HSM and then later one broadcasted (once it's been carefully inspected).
The amount is 6 billions: I think that the precautions taken here are beyond many's imagination.
Then the transaction itself to move those 6 bn has probably been prepared offline, on a fully airgapped computer, signed with a HSM and then later one broadcasted (once it's been carefully inspected).
The amount is 6 billions: I think that the precautions taken here are beyond many's imagination.
The money wouldn't be lost, they have a good relationship with Tether who can simply freeze and reissue.
I’m sorry I know nothing about Tether is it some sort of centralized money exchange? Sounds like it but I don’t know? Thanks
They issue tokens on various blockchains. They've encoded in the smart contracts that they can freeze funds.
Tether is a stablecoin that is controlled by a company that can freeze it. So yes, it's centralized.
Tether is a crypto that attempts to peg itself to USD using dodgy corp debt and other paper money.
So they have $1 per Tether sitting in a bank somewhere?
Tether is more like a fractional reserve bank at this point, so they should at least have $1 in reasonably liquid assets for every Tether issued. Which, in all honesty, is a more efficient way to recycle savings into the supply of capital—it would be tremendously wasteful to just park $60+ billion in a risk-free bank account. Of course, the problem is that they’ve repeatedly lied about the state of their balance sheet and misled the rubes into believing this silly fantasy about bank accounts full of idle cash.
> So they have $1 per Tether sitting in a bank somewhere?
You can get your Tethers back if you're moving 10-figure sums. Let's leave it at that.
You can get your Tethers back if you're moving 10-figure sums. Let's leave it at that.
Well, for a literal typo error, blockchain addresses have checksums built-in to prevent this.
Of course you can still just send to the wrong address entirely.
Of course you can still just send to the wrong address entirely.
You mean a typo in the destination address? There's a zero percent chance anybody is manually typing it, any sane system would have checks and balances (like, do we definitely control the destination address?). If they are sending the money externally, they'd have a secure way for the other party to communicate the address (like a signed message).
"a zero percent chance anybody is manually typing it, any sane system would have checks and balances"
I agree with your reasoning but it assumes facts not in evidence.
I agree with your reasoning but it assumes facts not in evidence.
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> probably not since they control the blockchain and they can fork it to undo the transaction
Do you have anything to back that claim up? I don't understand, since the whole fuss behind decentralized cryptos is that they are, you know, decentralized.
Do you have anything to back that claim up? I don't understand, since the whole fuss behind decentralized cryptos is that they are, you know, decentralized.
Tether is not decentralized.
Probably referring to the infamous Ethereum fork which is not a good comparison. That was because of a security vulnerability found in multiple high-profile smart contracts, not someone fat fingering an address.
I doubt Binance has the influence to convince anyone to fork just to save them. They have no outsized control over Tezos afaik.
They could probably convince Tether to blacklist and refund the stolen/lost coins though, which is maybe what GP meant. That should not be confused with forking the underlying chain though.
I doubt Binance has the influence to convince anyone to fork just to save them. They have no outsized control over Tezos afaik.
They could probably convince Tether to blacklist and refund the stolen/lost coins though, which is maybe what GP meant. That should not be confused with forking the underlying chain though.
Tether is not a real cryptocurrency.
Seems likely hot wallet to hot wallet. There's a lot of dispersal happening to small accounts that have been around for a while.
can someone explain the implication of this to a newbie like me?
when you move a large amount of cryptos to an exchange it is seen by the market at large as a sell signal
when a large amount of cryptos are moved off of an exchange, it is seen as a bullish signal because it means that they will be chillin' for a bit and not actively traded.
a bunch of weird Tether IOUs being moved off exchange might mean they plan to redeem these for dollars (idk how this even works) or they might be doing a bunch of OTC trades, or stackin NFTs or something
when a large amount of cryptos are moved off of an exchange, it is seen as a bullish signal because it means that they will be chillin' for a bit and not actively traded.
a bunch of weird Tether IOUs being moved off exchange might mean they plan to redeem these for dollars (idk how this even works) or they might be doing a bunch of OTC trades, or stackin NFTs or something
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Can someone unpack “stackin NFTs” for me?
Buy overpriced NFTs in exchange for UST and hold them until they find another greater fool to resell the item to
I think what they meant is that Binance may be using the funds to buy NFTs
Nothing, large exchanges rotate their cold storage around all the time for all kinds of reasons, every time this happens a bunch of people on Twitter go wild and it's a nothingburger 99% of the time.
Kind of ridiculous that we may have an ETF on #bitcoin futures tomorrow without options on bitcoin futures on major retail brokerages. The princess lives in another castle !
Paging Vlad and Baiju.
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What's the story here? Why is this front page news?
It's an open blockchain. You can see transactions. That's not news in itself.
It's an open blockchain. You can see transactions. That's not news in itself.