- Tether has recovered the $1 million in USDT wrongly sent to Defi address
- The traders who made the mistake sent an SOS on Twitter
- Tether managed to recover the lost funds because of its centralized structure
Cryptocurrency News Today – according to reports, the most valuable stablecoin offering Tether, has recovered and sent back over $1 million (1,010,808 USDT) in USDT to a group of Chinese traders. The traders in error transferred the funds to the wrong DeFi (decentralized finance) address.
On the 8th of September, the over-the-counter group of Chinese trading going with the moniker ‘Bill,’ “accidentally” moved the funds to a Swerve token contract. When the error became obvious the group couldn’t retrieve it. In an act of desperation, the traders sent an SOS on Twitter. They hoped that help will come quickly. And they were fortunate as the situation has now been addressed.
The 1,010,808 USDT ($1.02 million) Has Been Returned to the Chinese Investors
The chief technology officer at Tether and Bitfinex, Paolo Ardoino, had some words for issuers of Tethers centralized stablecoin, USDT. He responded to the SOD and requested that the affected traders open a support ticket. According to Ardoino:
“If USDT ERC20 is stuck in a user address we can recover it. But to be sure, please try to reach our customer care and we will try our best.”
Then a few days on, some good news about the issue came through, with added doses of caution on DeFi. Ardoino made the following tweet:
“Use DeFi protocols at your own risk. If you use them, use Tether. 1 million in USDT has been recovered and sent back to the legitimate owners (a group of Chinese traders).”
Ardoino shared an Etherscan transaction alongside his tweet. The transaction details show that a total of 1,010,808 USDT, which is reportedly valued at $1.02 million, has been returned to the Chinese investors who wrongly sent the funds to DeFi addresses.
Tether Managed to Recover the Lost Funds Because of its Centralized Structure
Tether managed to retrieve the lost funds because of its centralized financial network structure, which gives it some level of control over user funds that a non-custodial Defi platform wouldn’t provide. The CSO of Blockstream, Samson Mow, gave suggestions on how to get the funds back. He insisted on burning the $1 worth of USDT and re-issue. But his recommendation did not fly. Ardoino on the other hand explained how the lost funds could be properly retrieved. According to him:
“The only viable solution here would be providing an additional signature for each transfer. The signatures must be provided by a Tether watchtower. It must be a system that would allow Tether to “freeze” the funds. However, burning tokens on special addresses are not possible.”