At The End Of Your Tether: Addressing, Responding To And Insuring Cryptocurrency Theft

Tether Suffers $31 Million Loss of Tokens

On November 20-21, 2017, Tether, the company behind USDT – a digital token backed by fiat currencies like the dollar and euro – disclosed that a hack resulted in the loss of $30.95 million worth of tokens.¹ Tether posted an announcement to its website November 19 reporting that a "malicious action by an external hacker" resulted in the coins being "removed from the Tether Treasury wallet" and "sent to an unauthorized Bitcoin address."² Tether is now working to "blacklist" or otherwise inhibit hackers from using the stolen coins.

The Tether hack illuminates the privacy, reputational, financial and recovery risks associated with issuing, owning and storing digital currencies. These risks and events are likely to repeat themselves as more initial coin offerings ("ICO") come to the market, and the prices of digital currencies continue to soar.