Tether accidentally issues $5bn worth of USDT, claims it was an issue with decimals 🚨 This article is 5 years old...
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Tether accidentally issues $5bn worth of USDT, claims it was an issue with decimals
2 min read
Updated: Nov. 7, 2019 at 2:31 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Tether, the issuer of the USDT accidentally issued $5 billion worth of its own stablecoin while Poloniex was conducting a USDT chain swap from Omni to Tron. The CTO of Bitfinex and Tether said there had been an issue with the “token decimals,” after which the company burned the entire 5 billion supply.
Tether makes a $5 billion mistake
In what could be the most expensive typo ever made, Tether mistakenly issued and subsequently burned 5 billion USDT coins. The mistake was first spotted by Whale Alert on July 13, a Twitter account dedicated to reporting major crypto transactions.
? ? ? ? ? ? ? ? ? ? 5,000,000,000 #USDT (4,996,932,524 USD) minted at Tether Treasury
— Whale Alert (@whale_alert) July 13, 2019
The tweet initially caused a massive stir in the crypto community, leaving many traders in disbelief over how the company managed to mint $5 billion worth of cryptocurrency.
More than the entire USDT supply suddenly issued on Tron.
This is a joke or a Tron bug, people.
— antiprosynthesis (@antiprosynth) July 13, 2019
However, Tether reacted quickly and burned the entire supply within minutes. Paolo Ardoino, the chief technical officer at Tether and Bitfinex, responded to Whale Alert’s tweet, owning up to the mistake. Ardoino said that there had been an issue with the “token decimals,” as the company was trying to move 50 million from Bitcoin’s Omni blockchain to Tron.
While preparing the issuance for Omni to Tron swap there have been an issue with the token decimals. Please check the burn transactions below @Tether_tohttps://t.co/reEW51qCqihttps://t.co/zo5i3ayTuQ https://t.co/h1Y9Mnr4Oq
— Paolo Ardoino (@paoloardoino) July 13, 2019
Justin Sun, the founder and CEO of Tron, confirmed that 50 million USDT was eventually transferred from Omni to Tron, providing the list of all token transfers to Tron.
50 million #USDT transfer from Omni to #TRON. Please check the total issuance here: https://t.co/AM8cK07PAh
— Justin Sun (@justinsuntron) July 13, 2019
The crypto community is not happy with Tether
After the dust from the incident had settled, a few theories about how and why did Tether make such a disastrous mistake came up. On July 14, the Tether Treasury burned 4.5 billion USDT, which could mean that Tether’s original intention was to create 500 million USDT.
While this sounds like a reasonable explanation on how the company accidentally turned 500 into 5000 million, it left the question of how was it able to create 500 million USDT in the first place. Tether hasn’t been a stranger to controversy, as doubts about its ability to back all of the USDT in circulation with fiat currency have been increasing in the past couple of years.
Conspiracy theories about whether this was an intentional act to manipulate the price of Bitcoin were quickly shot down by Ardoino himself, who said that mistakes like these can actually happen. Ardoino claimed the company was dealing with different toolchains across multiple blockchains, allowing a mistake like this to slip through.
Unfortunately we have to play with different toolchains across multiple blochains and sometimes issues happen. We're working anyway to prevent this from happening in the future. @Tether_to https://t.co/QxAF0QorY5
— Paolo Ardoino (@paoloardoino) July 13, 2019
It’s hard to say whether Tether’s accidental $5 billion inflation had anything to do with Bitcoin‘s sudden drop in the past couple of days, as it often causes significant fluctuations in its price. USDT briefly lost its dollar peg after the news about the accidental mint gained traction, but managed to recover within hours.
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Tether
$1.00000
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
Bitfinex
Bitfinex is a digital asset trading platform offering state-of-the-art services for digital currency traders and global liquidity providers.
Poloniex
Poloniex is a US-based cryptocurrency exchange platform offering a wide variety of digital assets.
Paolo Ardoino joined Bitfinex at the beginning of 2015 and now serves as Chief Technology Officer.