Tether managed to resolve a dispute on its platform, recovering $1 million USDT sent in error. This is thanks to the CeFi.
One of the biggest fears of traders in the crypto market happened on September 8th. Chinese traders mistakenly sent a 6-digit amount to the wrong DeFi address. However, everything was resolved thanks to centralized finance. And so Tether recovered $1 million USDT.
The world of crypto currencies is highly volatile. So the more conservative investors do not have enough confidence to go deep into the market. Hence the Stablecoins were born.
These „tokens“ that are associated with the value of a fiat currency (such as the dollar or the euro), with material goods such as gold or real estate, or other cryptomoney, provide that necessary confidence to users.
Tether is the most recognised of the Stablecoins. And today we will talk to you about a controversy that included Tether and the DeFi.
What is the difference between the DeFi and the CeFi?
An accidental shipment of $1 million USDT in Tether
Accidental shipments in the crypto ecosystem are an everyday occurrence, as sometimes traders get carried away by market volatility. It’s a mistake that we’ve all had to swallow.
Now, imagine that little mistake of not carefully checking where the transfer will be sent costs you $1 million USDT.
Well, that happened on September 8th to the group under the nickname ‚Bill‘. They „accidentally“ transferred the money to a Swerve token contract and for a moment, believed that money was lost.
In desperation, the traders sent out an SOS on Twitter and hoped that the controversy would be resolved. And fortunately, they were lucky, getting their money back.
For Paolo Ardoino, Director of Technology at Bitfinex and Tether, issuers of the stable centralized currency USDT, in which this erroneous payment was made, responded and requested that „Bill“ open a support ticket.
„If it’s USDT ERC20 stuck in one direction, we should be able to recover it, but to be sure, please contact our customer service and we’ll do our best,“ he said.
And then a few days later, on September 11, the good news came, mixed with doses of caution. Ardoino tweeted the following:
The highlight of that tweet is Ardoino’s clear warning message about the DeFi. For him, decentralised finance is a risk for crypto users.
Tether, the stablecoin that keeps growing
„This was solved, thanks to Tether being a centralised financial network“
Tether was able to recover lost funds because the platform is CeFi-based, which gives it some control over user funds. A function that a DeFi platform without custody would not.
For the defenders of centralised finance, the security and secure tracking of their users‘ transactions is their banner to defend. Therefore, this could be considered a victory for the centralised finance team.
Theter recovers $1 million USDT that was transferred by mistake. This is a clear victory for the CeFi
Theter recovers $1 million USDT that was transferred by mistake. This is a clear victory for the CeFi. Source: Etherscan
Finally, the Etherscan transaction shared by Ardoino shows that a total of 1,010,808 USDT, valued at $1.02 million, was sent to Chinese investors.
What do you think of Tether’s management in recovering $1 million USDT in record time?