Binance just transferred 6B Tethers to an unknown address

https://twitter.com/whale_alert/status/1450005292599726083

by dustintrex • 5 years ago

61 60 5 years ago

twitter.com

par• 5 years ago

can someone explain the implication of this to a newbie like me?

arthurcolle3• 5 years ago

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

BitAstronaut• 5 years ago

Can someone unpack “stackin NFTs” for me?

radicaldreamer• 5 years ago

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.

dylkil• 5 years ago

so they are changing cold wallets, how is this news?

X6S1x6Okd1st5• 5 years ago

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)

humps• 5 years ago

Isn't it maintenance related as linked to in a reply to that tweet? https://www.binance.com/en/support/announcement/27d6afd43209...

laumars• 5 years ago

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.

threevox• 5 years ago

Taking Tether's PR statements at face value is like doing the same for Bernie Madoff

adflux2• 5 years ago

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.

neom• 5 years ago

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)?

michaelt• 5 years ago

Tether is pretty notorious for not being audited. And for repeatedly having auditors look at their accounts then run for the hills.

agsnu• 5 years ago

https://www.bloomberg.com/news/features/2021-10-07/crypto-my...

https://www.theverge.com/2021/10/15/22728253/tether-41-milli...

archontes• 5 years ago

They have no legal obligation to pay anyone back.

short12• 5 years ago

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

adflux2• 5 years ago

Yes they do, https://tether.to/legal/ even listed in their policy.

elliekelly• 5 years ago

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.

Cthulhu_• 5 years ago

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.

thebean114• 5 years ago

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).

dsr_• 5 years ago

"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.

steelbrain• 5 years ago

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.

CydeWeys• 5 years ago

Tether is not decentralized.

thebean114• 5 years ago

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.

lawn• 5 years ago

Tether is not a real cryptocurrency.

etaioinshrdlu• 5 years ago

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.

TacticalCoder• 5 years ago

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.

askmike• 5 years ago

The money wouldn't be lost, they have a good relationship with Tether who can simply freeze and reissue.

naveen99• 5 years ago

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.

latchkey2• 5 years ago

It cost $0.03 for the transaction.

vkou2• 5 years ago

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.

reidjs2• 5 years ago

Didnt some major bank recently make a similar-scale mistake from a weird UI issue, and they couldn’t revert the transaction?

X6S1x6Okd1st5• 5 years ago

Look at the address they sent to. This was not a mistake.

https://tronscan.org/#/address/TV6MuMXfmLbBqPZvBHdwFsDnQeVfn...

latchkey2• 5 years ago

That is a UX issue. Nobody is arguing that crypto is prime time ready for grandma to use it.

smoldesu• 5 years ago

At this rate, that's worth more than the Tether.

bpodgursky• 5 years ago

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.

X6S1x6Okd1st5• 5 years ago

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.

aazaa• 5 years ago

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.

X6S1x6Okd1st5• 5 years ago

Seems likely hot wallet to hot wallet. There's a lot of dispersal happening to small accounts that have been around for a while.

Binance just transferred 6B Tethers to an unknown address

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