Tether can "steal your money whenever they feel like it," says developer

04 Jul, 2019 | Updated: 04 Jul, 2019
by Will Heasman
Opinion
Tether can steal your money whenever they feel like it, says developer

Within a post gaining traction on the r/Cryptocurrency subreddit, a smart contract developer relayed their shock after discovering that Tether had a built-in function to “steal” money from investors…

The post, submitted by a user known as woodydeck, starts by explaining how they came to uncover what they dub a “blacklist function” within USDT.

Failsafe or sinister?

According to the post, woodydeck was offered payment in USDT, not having used Tether before the developer decided to check out its contract, something they state was an “instant WTF” moment.  That’s because the developer discovered Tether uses a “blacklist function” which, according to the developer, can, “arbitrarily steal your money whenever they feel like it or are pressured to.”

Woodydeck goes on to explain that even though they’re fairly clued up on cryptocurrency, they would have never had known that Tether contracts were capable of this kind failsafe action:

“I am the 1% of crypto users in terms of knowledge and I didn't know,” said the developer, “so I'm sure many others never considered this. Many who probably use Tether thinking it is like any other standard token.”

The post ends with a warning to do your own research.

The comments appeared less surprised at this supposed revelation, with one Redditor  stating that the blacklist function was a fairly common theme within stablecoins:

Another noted that the clause about the blacklist function was on the Tether website:

Indeed, the website does relay that post a security breach back in November 2017, Tether decided to instill a function that would “freeze and blacklist stolen Tethers.”

While a failsafe like this is fairly understandable, this kind of power and control is contrary to the very core of crypto ideals, going majorly against the fundamental nature of decentralization.

Rather than a warning, this can be seen as yet another example of why crypto enthusiasts and newcomers alike should take responsibility for their capital and only invest in what they know, and understand.

Are you surprised to hear about Tether’s blacklist function? Are you bothered? Let us know what you think in the comments below!

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