Bitcoin and Ethereum Prices Take a Hit After Another Cryptocurrency Was Hacked

November 21, 2017, 10:39 AM UTC

The value of bitcoin briefly took a dip on Monday evening after a big theft allegedly affected a separate virtual currency system called Tether.

Tether’s cryptocurrency, the USDT, is pegged to the U.S. dollar. The operators of the Tether network announced in a since-removed notice that $30,950,010 of the tokens were “removed from the Tether Treasury wallet” on Sunday and “sent to an unauthorized bitcoin address.”

The Tether team said they would blacklist the address, so the tokens stolen in the hack could not be converted into U.S. dollars. However, some in the cryptocurrency community criticized the service for its lack of transparency in dealing with the situation, and the implications of it being able to disable specific addresses in this way.

According to Bloomberg, the news knocked bitcoin’s value down by 5.4%, its worst fall in a week. However, bitcoin mostly recovered within hours, and was trading just north of $8,200 by 5:30 a.m. EST. Ethereum also took a small hit.

Tether is not exactly a big player in the cryptocurrency scene, like bitcoin or Ethereum are. It’s only supposed to act as a proxy for national currencies such as the dollar, euro and yen, for tasks such as settling balances between exchanges. It uses blockchain technology, but claims to avoid bitcoin’s volatility through its currency pegs.