Double-spend Vulnerability Discovered On Tether BySlowMist

A private Chinese cybersecurity company called SlowMist has announced that it uncovered a double-spend vulnerability in Tether (USDT) and drove the Bitcoin price to go below $6,000.

The Chinese firm made the announcement through a Tweet on June 28, through which its researchers revealed that they were able to send the Tether cryptocurrency to a certain crypto exchange which they did not name. Additionally, they managed to transact with the cryptocurrency without correct field values. What this means is that clients might find themselves being credited even without actually sending the digital currency, thus causing a double-spend situation.

“It appears that what happened here is that an exchange wasn't checking the valid flag on transactions,” stated SlowMist.

According to a translation of the tweet, the transaction resulted in a pretend value in which the exchange was recharged but the user did not lose any USDT. The tweet also revealed that SlowMist has advised the exchange to suspend its USDT recharge function so that the code can be evaluated in order to fix the flaw.

Although SlowMist did not reveal the identity of the crypto exchange, there has been speculation that it might have been OKEx. This is because OKEx recently posted a statement talking about the error. The exchange claims that it carried out a series of tests after being informed of the vulnerability.

The double-spend has serious consequences especially if it is exploited and also noted that it seems to be a problem associated with the exchange rather than Tether. Earlier this week, the Tether organization released 250 million new Tether coins that are backed by the U.S dollar at a 1:1 ratio. This comes after the release of 300 million tokens a few months ago and the instance resulted in a slight increase in the price of Bitcoin.

Although Tether prides itself on being a stable cryptocurrency since it is backed by the U.S dollar but that has not kept it from being involved in some controversies. For example, it made headlines earlier this month after a research report was released by the University of Texas, claiming that USDT was used to manipulate the price of Bitcoin in 2017.

The new report about the double-spend vulnerability is the latest controversy to hit the cryptocurrency although this time it looks like it could be a flaw with the exchange. Fortunately, it seems that the flaw had not been exploited by malicious hackers to steal the cryptocurrency.