Tether (USDT) which has been frozen by its issuer Attached during the recent Poly Network hack have been returned to their rightful owners, Attached announcement. However, this has raised concerns that this particular part of the cryptocurrency space is not as decentralized as it claims.
Tether’s official Twitter account on Wednesday announcement that they had unlocked all the funds stolen in the Poly hack, after working closely with the network to follow all the “strict protocols” that were put in place.
They added that “Freezing funds is not an issue we take lightly – by being the first to act, Tether has demonstrated its commitment to security and its continued vigilance to ensure the community always passes. first. “
Paolo Ardoino, CTO at Tether, Explain the process in a thread on Twitter.
After being contacted by the Poly team, Tether’s tech team organized the multisig freezing process, Ardonio wrote. The address they froze had received hundreds of millions of dollars in different cryptoassets, with no other previous activity like participating in centralized or decentralized exchanges, decentralized funding pools (DeFi), etc. This, according to Ardoino, convinced them that the address belonged to the hacker and the funds were frozen.
As for the legal process, users who wish to report a hack will need to write an email to the designated address in Tether and attach a letter from law enforcement that corroborates the story and the freeze request. The applicant will also need to complete Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) procedures which are usually reserved for bank grade customers.
After that, the process of returning the funds to the rightful owners can take up to several months, as the company makes sure that there are no other claimants.
On the flip side, many in the crypto community are concerned that this means Tether is centralized, which goes against the very pillars of the industry. Even in the face of disastrous hacks that cost users millions of dollars, many believe that freeze funds are setting a dangerous precedent.
Just like traditional banking, Tether USDT is CeFi, not DeFi, and it’s very scary. The fact that they can monitor and freeze people’s funds at all times is exactly one of the main reasons DeFi was created, to avoid such a thing.
– Oliverrr! (@OliverBjm) August 25, 2021
Additionally, if a crypto project is powerful enough to freeze and reverse transactions – which is theoretically impossible in a completely decentralized environment – many believe they should be kept to the same standards as other financial institutions.
Nicholas Weaver, Principal Investigator at International Institute of Informatics in Berkeley, California, United States, writing:
“Despite the decentralized claims, there are a few entities that can (and should) be brought into line, including ‘decentralized’ exchanges, those that fund decentralized exchanges, leading cryptocurrency miners and stablecoins like Tether In particular, these entities should be required to implement effective anti-money laundering controls.
In the meantime, victim of yet another recent hack, the Japanese stock exchange Global liquid, To secured a crypto exchange loan FTX to be used for the liquid capital position and to accelerate capital generation projects, as well as to provide liquidity.
They added that “Liquid is grateful for FTX’s vote of confidence and the valuable support of its users as it continues its mission to serve the growth of blockchain-based financial services in a compliant manner.”
– A Tale of Two Hacks: Poly Hacker tilts, a liquid to restore operations
– Liquid Exchange hacked, working with other exchanges to recover funds
– Poly Hacker extends return of funds, position offered as Chief Security Advisor
– “Are we going to play a game?” », Asks Poly Network Hacker when the funds are returned
– The risks of centralized stable coins materialize in a freeze of 100,000 USDC
– Tether’s assets exceeded its liabilities (February 28) – Auditor
– T-Mobile ‘Hackers Want BTC 6’ For Data, US Gives Dark Web $ 10 Million In Crypto (UPDATE)
– Another DeFi hack: PancakeSwap, Compromised Cream Funding Websites