From NewsBTC
According to the automated translation of the Tweet, originally given in Mandarin Chinese, the user was able to illegitimately add USDT value to the exchange’s server, giving a guise of added funds.Read more: https://www.newsbtc.com/2018/07/01/security-firm-identifies-potential-tether-usdt-double-spend-bug/This vulnerability essentially allowed the user to be potentially credited for USDT that was not sent to the exchange.
It is unclear whether the exchange affected, which remained unnamed, has made any actions to amend the issue.
According to the information of the transaction in question, the exchange accepted a transaction that had invalid information, with the exchange marking the 694 USDT “false” transaction as valid.
Well shit this is not good. While many would consider ethereum to be the second most important coin next to bitcoin I would argue it's Tether's USD peg which underpin so much of bitcoin that makes it the second most important coin in existence today. If shit goes sideways with Tether we're all going to feel major pain.
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I thought Tether went sideways a while back when they calculated that there was no possible way they had enough $US to match their coins.
https://bitcoinmagazine.com/articles/warning-signs-timeline-tether-and-bitfinex-events/