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Tether Freezes $2.5 Million Possibly Linked to Cross-Chain System Attack

tether freezes

The issuer of USDT Tether has frozen the equivalent of $2.5 million in funds that may be connected to an attack exploiting a flaw in the Multichain protocol’s cross-chain system. The announcement was made by the Fantom Foundation on Twitter which stated that the funds were transferred from Multichain to the Ethereum blockchain.

Multichain’s Losses and Suspicion Surrounding the Incident

The frozen funds are believed to be linked to Multichain’s loss of $126 million in cryptocurrencies which had been blocked since May. The case remains under investigation and it is uncertain whether the movement resulted from a hack or was executed by someone with acces to the platform’s system. Blockchain security firm PeckShield has tracked the stolen tokens which include Wrapped Bitcoin (WBTC), Chainlink (LINK) and stablecoins like USDC, USDT and DAI worth $ 126 million . The stolen assets were transferred to six new Ethereum addresses .

tether freezes 2.5 million possibly linked to cross chain system attack

Risks of Chain Bridges and Impact on Multichain

This most recent one reveals the flaws of chain bridges which have become a popular target for hackers . According to DeFiLlama figures bridge assaults were the cause of $ 2.66 billion or 48 % of the $ 5.44 billion in DeFi protocol hacks . The case has raised questions about the security of cross-chain systems and their vulnerabilities . In retaliation Binance on July 5th  stopped letting its users withdraw Multichain tokens.

Impact on Tether and Multichain

The decision of Tether to stop accepting payments shows us their dedication to closing any probable security gaps and securing its users . The incident emphasizes just how important it is to keep the bitcoin ecosystem’s security structure in place . While handling the impact of the attack and the investigation into what happened Multichain faces enormous obstacles.

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