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Tether (USDT) holds peg despite DDOS ransom attack

By Aaron Woolner

06:12, 20 June 2022

Someone exchanging money for a digital key
Tether (USDT) holds pegs despite DDOS ransom attack - Photo: Shutterstock

Tether (USDT) has held its peg despite a DDOS ransom attack in the latest setback to the crypto sector following the implosion of algorithmic stablecoin UDT at the start of May.

Tether’s CTO, Paolo Ardoino, confirmed over Twitter that the organisation’ website had come under a sustained DDOS ( distributed denial-of-service) attack on Saturday following a ransom demand. 

The hackers' timing convinced with BTC, ETH and other altcoin prices going on a rollercoaster ride, thanks to the ongoing issues related to the Celcius Network and the fear that further forced liquidations will follow.

Ethereum to US dollar

Ardoino said that Tether.io has seen the number of requests increase from 2,000 to over 8 million every five minutes during the DDOS. 

Unlike a slip soon after the LUNA crisis developed, this time however, Tether clung like a limpet to its peg. 

According to data from CoinMarketCom, the third largest digital coin by market capitalization is trading at 99.87 US cents in late Morning Asia trading on Monday. 

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Troubles for Tron

UDST, is a collateralized digital token which is backed from a range of US dollar and euro assets and its strong performance contrasts with how its algorithmic stablecoin peers are faring. 

Last week with DAO (decentralized autonomous organization) backing, the Tron network had to deploy nearly a billion of USDC in order to stop its algorithmic stablecoin USDD from fractring its dollar peg after it traded as low as 91 cents.

TRON to US dollar

Tether declined to give further details on the DDOS incident other than to say that it had been ‘mitigated’, however the latest incident shows the pressure that stablecoins and the crypto lending platforms that use them are under.

The Celcius Network recently froze withdrawals, following liquidity issues linked to an Ethreum derivative, stakeETH (stETH) which it has invested heavily in. 

DOGE/USD

0.13 Price
+1.000% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

XRP/USD

0.60 Price
+3.190% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

SOL/USD

171.52 Price
+0.660% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

BTC/USD

66,743.50 Price
-0.450% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

Last week Tether was forced to issue a statement saying that it had liquidated all its exposure to Celcius at no loss and it also has no connections to the embattled crypto hedge fund, Three Arrows Capital.

What is a DDOS? 

A distributed denial-of-service (DDOS) attack is a malign attempt to disrupt a website or online service by flooding it with requests. 

By massively ramping up website traffic, DDOS attackers can effectively shut it down. 

The most infamous crypto linked ransomware attack so far was the one on the Colonial Pipeline in May 2021, which effectively shut down parts of the US energy infrastructure for several days. 

Colonial paid the requested $4m ransom but the majority of the BTC the firm handed over was quickly recovered by US authorities.

Bitcoin to US dollar

One aspect of  Colonial case was it highlighted the ease at which the government can track BTC transactions and as a result some criminal gangs made a shift into privacy coins such as Monero and Zcash. 

However, a number of major exchanges do not accept privacy tokens leaving holders facing a problem in off-ramping - converting to crypto - their assets. 

Indeed one interviewee recently told Capital.com that the European Union’s latest AML framework meant that these types of digital assets are “essentially useless”, within the trading bloc.

Markets in this article

BTC/USD
Bitcoin / USD
66743.50 USD
-301.8 -0.450%
ETH/USD
Ethereum / USD
3512.09 USD
2.4 +0.070%
EUR/USD
EUR/USD
1.08860 USD
-0.00114 -0.100%
TRX/USD
TRON / USD
0.13721 USD
0.00018 +0.130%
DXY
US Dollar Index
103.945 USD
0.135 +0.130%

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