Tether inadvertently prints $ 5 billion USDT, bitcoin exchange rate

Last weekend Tether made a big mistake. The stable coin manufacturer of the cryptocurrency tether of the same name accidentally made five billion new coins. Incidentally, these coins were immediately destroyed again.

There appeared to be some confusion when Tether offered help to cryptocurrency exchange Poloniex. Poloniex was working on a chain swap, which means that coins are moved from one blockchain to another. In this case, tethers of the blockchain from Omni to those of Tron were moved, according to the CTO of Tether Paolo Ardoino.

He explains this on the basis of three tweets:

2/3 It’s based on market demand. Imagine that there is an exchange that has support only for Tether-ETH and has a lower BTC price than others. Lot of customers will need Tether-ETH instead of Tether-Omni. @bitfinex acts as a gateway between the two (several) transport layers.

– Paolo Ardoino (@paoloardoino) June 25, 2019

3/3 This concept is really normal for assets that live on multiple chains. The total issue needs to stay the same, so if you need X Tether-ETH, you have to send back X Tether-Omni.

Happy to clarify further

– Paolo Ardoino (@paoloardoino) June 25, 2019

There were also problems with token decimals during the preparation of the chain swap.

While preparing the issue for Omni to Tron swap there are issues with the token decimals. Please check the burn transactions below @Tether_tohttps://t.co/reEW51qCqihttps://t.co/zo5i3ayTuQ https://t.co/h1Y9Mnr4Oq

– Paolo Ardoino (@paoloardoino) July 13, 2019

Cryptocurrency exchange Poloniex has also confirmed this itself. The company added: “An incorrect number of tether (USDT) was made by accident, this has since been corrected to the correct number.”

That the coins have been destroyed (or burned in cryptotal) can be found on the Tron blockchain. Here you will find the first 4.5 billion tether and here the remaining 500 million.

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Ardoino is not the worst and comes with some sort of apology.

Unfortunately we have to play with different toolchains across multiple blochains and sometimes happen issues. We’re working anyway to prevent this from happening in the future. @Tether_to https://t.co/QxAF0QorY5

– Paolo Ardoino (@paoloardoino) July 13, 2019

Tether is quite controversial. You cannot deny that tether plays a very large role in the price of bitcoin and other cryptocurrency. We wrote earlier:

Incident caused by the use of multiple blockchains

Ardoino explained that Tether intended to make a swap of 50 million USDT tokens based on Omni on the Tron block, but a mistake was made with decimals. During the transfer process, Tether inadvertently issued 5 billion USDT.

Ardoino explained:

“Tether emits multiple chains (Omni, ETH, ..) When Bitfinex receives too many Tether-Omni deposits and then users want to withdraw Tether-ETH, Bitfinex sends back to Tether-Omni and receives the same amount in ETH. ​​”

Poloniex confirms the error and resolves the situation

The Poloniex Exchange, owned by Circle Finance, has confirmed the error on its own Twitter account:

“An incorrect USDT amount was issued in error, and this was resolved to the desired value.”

The coins erroneously issued were destroyed, Ardoino providing links to those transactions.

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He justified the error through the message:

“Unfortunately, we work with various tools on multiple blockchains and sometimes problems happen. We work to prevent this from happening in the future. “

Currently, USDT is issued on the Omni, ETH and Tron blockhains.

The Bitcoin price was affected by what happened. At this time, they are traded at $ 10,000.